Luxury-themed exchange-traded funds listed in South Korea are struggling to gain traction. Analysts attribute the weakness to a delayed recovery in Chinese consumption, long seen as the main growth engine for the global luxury market, and to earnings at major European luxury houses falling short of market expectations, which has deepened doubts about growth across the sector.
The KODEX Europe Luxury TOP10 STOXX returned minus 5.25% over the past month, according to ETF CHECK data released on the 21st. Retail investors sold 109 million won ($76,000) worth of the fund in just one week. The HANARO Global Luxury S&P (Synthetic) also posted a negative return of minus 1.27% over the same period. The KODEX fund tracks the STOXX Europe Luxury 10 index, made up of 10 leading European luxury companies. Its main holdings include LVMH, owner of Louis Vuitton and Dior, as well as Hermes and Richemont, the parent of Cartier and Van Cleef & Arpels. The HANARO product tracks the S&P Global Luxury Index, which comprises 80 global luxury goods and premium services companies.
The ETFs' underperformance reflects deteriorating earnings at the European luxury companies that dominate their holdings. The combined market value of the 10 companies in the STOXX Europe Luxury 10 index has fallen by about $350 billion (463 trillion won) so far this year as of October, according to Reuters. Hopes for a rebound in the luxury market have also faded as high-income Chinese consumers, long regarded as the sector's biggest spenders, have tightened their purse strings amid economic uncertainty.
Repeated price increases across the luxury industry have driven customers away and slowed the pace of earnings recovery, weakening the sector's growth momentum. The number of luxury consumers worldwide fell to 340 million in 2025 from 400 million in 2022, according to global consulting firm Bain & Company. An official at a large asset management firm said the pace of any recovery will depend on consumption trends in the U.S. and China and on pricing strategies at luxury companies, adding that a return to the high growth rates of the past is unlikely in the near term.