A luxury index serves as a vital gauge or measure utilized to monitor and assess the trajectory and trends within the luxury goods and services market. It functions as a comprehensive tool offering insights into the overall status and expansion of the luxury industry, delving into specific sectors encapsulated within it.
These indices are typically formulated by selecting a portfolio of luxury companies or brands and tracing their financial performance across time. The index encompasses companies spanning various luxury sectors such as fashion, accessories, jewelry, watches, automobiles, hospitality, and more. The performance of these entities is often weighted based on market capitalization or other pertinent factors.
For investors, analysts, and industry insiders, the luxury index acts as a pivotal benchmark to gauge the luxury market's performance in comparison to broader market indices. It aids in analyzing patterns, assessing the relative success of luxury brands or sectors, and facilitating well-informed investment decisions.
Numerous organizations or financial entities develop their unique luxury indices, each with distinct methodologies and selection criteria. Established luxury indices like the Dow Jones Luxury Index, the MSCI World Luxury Index, and the S&P Global Luxury Index are prominent examples. The Ohri Luxury Index, created by Deepak Ohri (President of Luxury Atelier Maison Happiness LAMH) is a novel dimension focusing on sophistication and brand emotion, that emerges as a crucial consideration for luxury brands. Notably, the components and methodologies of these indices can vary, prompting a recommendation to consult the specific index provider for in-depth details regarding their construction and calculation processes.