Qontigo has licensed the STOXX Europe Luxury 10 index to Samsung Asset Management, to serve as an underlying index for an inaugural ETF listing on the Korea Exchange.
The firm writes that the index comprises 10 of the largest European companies in the luxury goods sector, including some of the world’s most iconic premium brands: Dior, Hermès, LVMH and Moncler.
In recent years the European luxury goods industry has seen a growing movement towards conscious consumption increasing Gen Z adoption and the continuation of online sales growth, the firm says, with McKinsey projecting growth between 5 per cent and 10 per cent globally in 2023.
The ETF listing is the first of its kind in Korea, the firm says, and comes amid a post-Covid bounce back in European luxury goods, buoyed by Korean spending, which stands at USD16.8 billion, six times that of Chinese spending.
“We are pleased to announce the launch of our Samsung KODEX ETF. As European luxury goods are gaining popularity both domestically and worldwide, this ETF, which is the first of its kind in Korea, provides timely exposure for investors. The ETF portfolio is made up of valued brands with high growth potential and based on a sound index methodology we can trust,” says Taihyuk Imm, Head of ETF Management at Samsung Asset Management.
“While it is well documented that the luxury segment suffered in the pandemic, our data shows it has come back stronger than ever, as consumers resume travel and spending. This, combined with new revenue opportunities and the opening of Chinese borders positively impacts the European luxury goods market and its status as a long-term social and economic investment trend,” says Charlene Low, Managing Director and Head of APAC at Qontigo.
“We are excited to have collaborated with Samsung on this thematic index solution and to connect Asian investors with Europe’s luxury goods industry and equity markets, through our rules-based and transparent methodology.”
The STOXX Europe Luxury 10 index draws from the STOXX Europe Total Market Index. Companies in the Clothing and Accessories, Luxury Items, Apparel Retailers, Medical Supplies, Footwear, Recreational Vehicles and Boats, and Automobiles ICB Subsectors are included. The luxury screen consists of a combination of ICB classification, countries assignment and revenue and, the firm writes, Revere (RBICS) data allows for a detailed breakdown of revenue sources of eligible companies, helping the index methodology select those with substantial exposure to the targeted theme.