Luxury stocks normalise for slower era of growth

Luxury stocks normalise for slower era of growth

A slowdown in growth in China, combined with anti-corruption measures are hitting the luxury stocks hard, and have resulted in the industry's growth stabilising in recent years, explain Scilla Huang Sun and Andrea Gerst, managers of the JB Luxury Brands fund.

For years, luxury stocks have been bolstered by the increasing wealth and improving social demographics of emerging market countries. However,   following years of underperformance, emerging market stocks were again hit hard at the beginning of the year and worried investors’ began pulling their money out of EM focussed funds. Although sentiment towards those regions has improved more recently, news of China’s sluggish growth rate in the first quarter of 2014, has again suggested the economy is experiencing a slowdown.  Data released last month suggested China’s growth rate had ...