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High-end brands defy the gloom but investors must be picky: From watches, to bags and Ferraris how to spot stocks with promise – and invest

By ROSIE MURRAY-WEST, FINANCIAL MAIL ON SUNDAY, 11 July 2022:

As global stock markets fall and the cost-of-living crisis bites, one sector is proving surprisingly resilient. Several luxury brands are defying the gloom as their wealthy clientele are still willing to splash the cash.

Mulberry has seen profits quadruple and last month restarted paying dividends for the first time since the pandemic…

The luxury brands that remain bombproof

The luxury label is slapped on many brands, from household names such as Apple and drinks seller Diageo to upmarket car makers such as Ferrari and Tesla…

However, not everyone who purchases luxury items is rich. Plenty of people on lower incomes save up for Apple AirPods, for example, or a once-in-a-lifetime Mulberry handbag…

A mixed picture… but good outlook for luxury stocks

Not all luxury brands are proving resilient. Many are still recovering from the impact of the pandemic. Burberry, for example, suffered from the drop in tourism, which it relies on heavily to get consumers into its shops…

Pick brands with the best reputation

Zenah Shuhaiber, portfolio manager at investment trust JPMorgan European Growth & Income, believes that brands with the strongest reputation tend to hold up the best in tough times…

The funds to invest in luxury brand shares

You can gain access to shares in luxury brands by buying a fund that holds several. This means that you don’t have to throw your lot in with just one or two companies…

James Carthew, head of investment trust research data service QuotedData, suggests AVI Global, which has a number of luxury holdings among a broader base of large companies.

Nearly seven per cent of the investment trust is invested in EXOR, which owns Ferrari, while Christian Dior makes up four per cent. AVI Global has risen 25 per cent over the past three years and is currently trading at a 10 per cent discount.

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