Profiting from the shopping habits of the wealthy, the Julius Baer Luxury Brands fund has launched in the UK market.
The fund gives UK residents access to a portfolio of luxury good brands such as Louis Vuitton, Cartier and Hermès, managed by luxury goods expert, Dr Scilla Huang Sun.
Originally launched in Switzerland January 2008, the fund currently has £30m under management and will be marketed through the Julius Baer Investment Products office in London.
Investment will initially be open to wealth managers, insurance companies, investment banks and fund of funds. It has an annual management fee of 1.6%.
The fund focuses on a wide range of leading luxury manufacturers from sectors such as fashion and accessorises, special foods and drink, cosmetics, cars and leisure. L’Oreal, Richemont SA and The Swatch Group are among the companies in the portfolio.
Huang Sun has 17 years of asset management experience, seven of which are in the luxury goods sector.
She believes the outlook for luxury goods is strong with ‘the rich getting richer’ as the spending habits of the wealthy are less affected by macroeconomic factors.
Huang Sun says: “While many people are tightening their belts, the wealthy are still spending. We have seen a growth in luxury good sales over the past six months and there is likely to be continuing demand, particularly among Asian consumers.
“Demand in China for example is expected to double over the next five years and the increasing numbers of wealthy people will have a positive effect on the revenues of luxury firms.”
She believes historically luxury goods consumption is less affected by recession compared to more cyclical consumer goods.
Since the launch, the fund has returned -4.8% compared to -8.1% for the MSCI WORLD Index and -11% for the MSCI World Consumer Discretionary index at 26 August.
Julius Baer Investment Products has over £36bn under management globally at 30 June 2008.IFAonline
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