S&P Indices has launched the S&P Global Luxury Index, consisting of 80 of the world’s largest publicly-traded and investable companies engaged in the production or distribution of luxury goods, or the provision of luxury services.
This new index is being licensed by E Fund Management Co, Ltd, one of the largest asset managers in China to create an investable index fund that will allow Chinese investors to track the luxury sector.
Each prospective constituent of the S&P Global Luxury Index is prequalified by membership of the S&P Global BMI Index, and is drawn from a range of industry sub-sectors from apparel, accessories & luxury goods to internet retail. Constituents must meet investability requirements and the Index uses a modified capitalisation weighting scheme that ensures stock-level diversification. Candidates are evaluated regarding their luxury status, and must meet other relevant criteria, such as minimum daily trading volume, to ensure investability. All constituents must be members of major developed-market indices, and to ensure diversification, no single constituent can make up more than 8% of the index.
"The S&P Global Luxury Index is one of our most imaginative exercises in building an index that tracks a popular, highly visible yet fluid and very diverse sector," says Alka Banerjee (pictured), Vice President Global Equity and Strategy at S&P Indices. "We expect the investment community to follow this Index closely as an important gauge of the overall health of the global luxury sector."
"We are happy to work together with S&P Indices, the world’s top index provider, to introduce the global luxury sector to China’s investors," said Mr. Yue Fan, Chief Product Officer at E Fund Management Company. "China investors need diversified products, and once the new fund is launched in the future, it will bring a good opportunity for China investors to share in the rising global luxury sector."