Not Leaving The Nest, But Buying Up Luxury Goods

Not Leaving The Nest, But Buying Up Luxury Goods
Luke Suddards

about 1 year ago1 min

Mentioned in story

So much for those dreams of getting that first job and getting out on your own: almost half of adults under the age of 30 are still living at home with Mom and Dad. The number was even higher during the Covid crisis, and it’s still at levels not seen during the Great Depression (blue line) Their decision to remain in the nest comes down to money: with 51% saying they’re saving money, and 39% saying the cost of rent is just too high. But there are other factors at play too, with more people in this age group pursuing higher education and fewer getting married.

Morgan Stanley says this long-term trend is good for luxury brands. The S&P Global Luxury Index suggests that’s true: the index is up about 114% since the Covid lows of 2020.

When young adults are able to save on rent, groceries, and other need-to-haves, they have more money left over for shiny nice-to-haves. And you could take advantage with an ETF such as the Amundi S&P Global Luxury UCITS ETF – USD (ticker: LUXU; expense ratio: 0.25%). Its top holdings include Richemont, LVMH, Tesla, and Hermés. From a single-stock perspective, Lululemon (LULU) and Tapestry (TPR) could be solid choices.

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