Roundhill Investments, a notable ETF sponsor focusing on innovative financial products, has introduced the Roundhill S&P® Global Luxury ETF (NYSE Arca: LUXX). This ETF, with a low expense ratio of 0.45%, aims to provide investors access to the luxury goods sector through an efficient and liquid ETF format.
LUXX tracks the S&P® Global Luxury Index, granting exposure to 80 prominent luxury companies worldwide. The global luxury market is predicted to grow by approximately 50% between 2022 and 2030, exceeding $600 billion in total market size. This growth is projected to be driven by Generation Y, Z, and Alpha, whose spending is expected to increase three times faster than other generations.
Historically, luxury companies like LVMH and Hermes have demonstrated strong pricing power and high margins, leading to substantial free cash flow generation. The S&P® Global Luxury Index, launched in 2011, has delivered an annualized total return of 11.8%.
The top holdings of LUXX at its launch include:
Hermes International: 8.2%
LVMH Moet Hennessy Louis Vuitton SE: 7.9%
Cie Financiere Richemont SA: 7.6%
Mercedes-Benz Group AG: 5.4%
Kering SA: 5.0%