Is now the time to invest in luxury goods companies?
Share prices have fallen due to slowing demand after the post-pandemic boom. But the sector is still expected to soar in value to $337.18 billion over the next seven years, according to a study by Research and Markets*.
Here, we give an overview of what’s happened and which investment funds with exposure to this area could be worth considering.
Please remember that the value of investments will fluctuate and returns may be less than the amount originally invested. Tax treatment depends on your individual circumstances and tax rules can change. Chelsea does not offer advice and so if you are unsure of anything please contact an expert adviser.
Luxury goods are high-end, premium-priced products that benefit from superior craftsmanship and a degree of exclusivity. These industries enjoyed unprecedented demand for everything from leather goods to watches between 2019 and 2023, according to McKinsey**. But the backdrop has changed. “US tariffs have redrawn trade maps and forced brands and their suppliers to rapidly adjust,” it stated.
Such pressures have slowed demand and caused the share prices of leading industry names to plunge more than 20% since the start of 2026**. However, this could provide an opportunity for investors.
Funds offering exposure to the luxury goods sector
IFSL Evenlode Global Equity
Hermès International, the French luxury goods company founded in the 1800s, is one of the 20 largest holdings in this portfolio***. It also holds L’Oreal, the cosmetics, haircare and perfume giant based in Paris, as well as Lindt & Sprüngli, the Swiss chocolatier***. The fund, which aims to provide capital growth, focuses exclusively on quality companies that can achieve sustainable growth – while minimising the need for additional capital reinvestment. Its success has been achieved with the help of ‘Eddie’, an in-house software system that helps the management team find high-quality, cash-generative companies.
UTI India Dynamic Equity
This fund invests in a mix of large, mid and small-cap Indian companies, with an investment process based on quality, growth and valuation. One of its holdings is in Titan, the world’s sixth-largest fashion company and a manufacturer of jewellery, watches and other items****. The fund’s strong investment team comprises 25 research analysts and fund managers with an average of 10 years’ experience in Indian equities. We believe this level of knowledge gives the management team, led by Ajay Tyagi, an edge over rivals in this area.
Fidelity European
It holds Compagnie Financière Richemont, better known as Richemont, one of the world’s largest luxury companies***. The Swiss company, founded in the late 1980s, provides luxury brands across jewellery, watches, fashion and other businesses. Fidelity European, co-managed by Sam Morse and Marcel Stotzel, has a disciplined, cautious, long-term focus. Although it’s not an income fund, the management team wants companies that can sustainably grow their dividends over time.
VT Tyndall Unconstrained UK Income
Burberry, the luxury British brand, was founded in the mid-1800s on the principle that clothing should protect people from the weather. Today, it’s a FTSE 100-listed stock with a global customer base and its most recent full-year total revenue is £2.46 billion^. It’s also the second-largest holding in the VT Tyndall Unconstrained UK Income fund***, a high-conviction, mid-cap-focused UK portfolio. The fund’s experienced lead manager, Simon Murphy, has been at the helm of this portfolio since joining Tyndall six years ago.
Brown Advisory US Flexible Equity
This fund may not have pure exposure to the luxury goods sector, but it does hold companies likely to benefit from the sector’s revival. It includes retailer Amazon***, which has a luxury stores section on its website, and both Visa and Mastercard, the global payment companies***. The aim of Brown Advisory US Flexible Equity, launched in 2014 and currently managed by Maneesh Bajaj, is to achieve capital growth.
IFSL Marlborough European Special Situations
Sarantis, a Greek consumer products business, has distribution agreements in place with leading international cosmetics companies. The company is currently the largest holding in the IFSL Marlborough European Special Situations fund***, which invests in businesses of all sizes across the region. We believe this is a true stock-picker’s fund, as David Walton, its lead manager, scours the market for under-the-radar opportunities.
Chikara Indian Subcontinent
Delhivery, the Indian logistics provider, works for ecommerce companies of all sizes, so it could realistically benefit from an uptick in demand for luxury goods. The company is a holding in the Chikara Indian Subcontinent fund***, a high-conviction, concentrated portfolio run by Andy Draycott. We like the index-agnostic nature of this fund and believe it’s well-positioned to deliver compelling long-term returns for investors.
