Clariden Banks search for a new investment theme has lead to the introduction of the Luxury Goods Equity Fund.
This offshore Oeic will invest in a range of luxury goods manufacturers with strong brand names including Gucci, Christian Dior and Porsche. It is a global fund but will invest mainly in Europe, where the majority of manufacturers are based.
The luxury goods sector is seen as a growth area due to increased demand for designer clothes, expensive fragrances and top of the range cars. Luxury goods are expensive because they tend to be high quality and may be limited editions of well-known brand names. This can also add to demand for them.
The funds investment strategy is a novel idea but there are many companies keen to find a gimmicky new angle to the theme funds bandwagon.
The Luxury Goods Equity Fund is denominated in the Euro, which is a volatile currency at present. On October 9, 2000 the Euro closed at 0.869 against the dollar. This compares to an all time high of 1.179 against the dollar on January 5, 1999. As a niche product, the fund is most suitable for investors who already have a well-rounded portfolio. It would not be suitable as an introduction to stockmarket investments.