To mark the coronation of King Charles III, ETF Express brings you eToro’s research, which suggests that retail investors could learn a thing or two from the new monarch’s taste in British brands.
The social trading and investing platform created a basket of 10 UK heritage brands, publicly traded or part of larger listed businesses, which have received a Royal Warrant of Appointment from King Charles.
The result is that the ‘eToro King Charles Index’ has outperformed the FTSE 100 by 24 per cent over the last five years, and by 62 per cent over the past three years. The index has also beaten the FTSE 100 by 10 per cent year-to-date, though over two years, the trend is reversed, with high-flyers Watches of Switzerland, Hermes (which owns Royal Warrant holder John Lobb), and Frasers taking a performance breather.
The Royal Warrant is granted to companies as a mark of recognition for the supply of goods and services to the Royal Household, and King Charles has granted 181 Royal Warrants to date. The vast majority of these have gone to small, local and family-owned businesses, while far fewer have gone to leading UK brands that are owned by public companies.
The King Charles Index is comprised of a combination of luxury listed brands, such as watchmaker Watches of Switzerland (Mappin & Webb), and larger conglomerates with UK heritage brands in their portfolio, for example Newell Brands (The Parker Pen Company).
The best performer in the index over five years has been Hermes, with 281 per cent share price growth. At the other end of the spectrum, Aston Martin shares have fallen 95 per cent in value in the last five years.
Commenting on the data, Ben Laidler, Global Markets Strategist at eToro, says:“The strong price performance of this index shows that heritage and luxury sells, regardless of economic ups and downs. The index, which ranges from rifles and watches to shoes and raincoats, has pretty consistently outperformed the FTSE 100, albeit with only one modest year where some gains were lost.
“The brands included in the index all have unique histories and this has given them an attractive combination of resilient demand and pricing power.”