ETFdb Logo
ETFdb Logo
  • ETF Database
  • Channels
    • Active ETF
    • Beyond Basic Beta
    • China Insights
    • Climate Insights
    • Commodities
    • Core Strategies
    • Crypto
    • Direct Indexing
    • Disruptive Technology
    • Energy Infrastructure
    • ETF Building Blocks
    • ETF Education
    • ETF Strategist
    • Financial Literacy
    • Fixed Income
    • Gold/Silver/Critical Minerals
    • Innovative ETFs
    • Institutional Income Strategies
    • Leveraged & Inverse
    • Managed Futures
    • Market Insights
    • Modern Alpha
    • Multifactor
    • Night Effect
    • Portfolio Strategies
    • Responsible Investing
    • Retirement Income
    • Richard Bernstein Advisors
    • Tax Efficient Income
  • Tools
    • ETF Screener
    • ETF Country Exposure Tool
    • ETF Sector Tracker Tool
    • ETF Database Categories
    • Head-To-Head ETF Comparison Tool
    • ETF Stock Exposure Tool
    • ETF Issuer Fund Flows
    • Indexes
    • Mutual Fund To ETF Converter
  • Research
    • ETF Education
    • Equity Investing
    • Dividend ETFs
    • Leveraged ETFs
    • Inverse ETFs
    • Index Education
    • Index Insights
    • Top ETF Sectors
    • Top ETF Issuers
    • Top ETF Industries
  • Webcasts
  • Themes
    • AI ETFs
    • Blockchain ETFs
    • See all Thematic Investing ETF themes
    • ESG Investing
    • Marijuana ETFs
  • Multimedia
    • ETF 360 Video Series
    • ETF of the Week Podcast
    • ETF Prime Podcast
    • Video
  • Company
    • About VettaFi
    • Get VettaFi’ed
  • PRO
    • Pro Content
    • Pro Tools
    • Advanced
    • FAQ
    • Pricing
    • Free Sign Up
    • Login
  1. Future ETFs Channel
  2. Affluent Consumer Stocks Might Provide Inflation Buffer
Future ETFs Channel
Share

Affluent Consumer Stocks Might Provide Inflation Buffer

Tom LydonJun 17, 2022
2022-06-17

Consumers of all stripes are feeling the pinch of inflation, but some analysts believe affluent consumers are prepared to deal with high prices and some are likely to continue spending.

Not all consumer discretionary funds are adequately levered to the theme of spending resilience among high-end consumers. One that has that exposure is the Goldman Sachs Future Consumer Equity ETF (GBUY C). To be clear, GBUY isn’t a dedicated consumer cyclical exchange traded fund. In fact, that’s merely the ETF’s second-largest sector allocation at 25%.

Still, owing to active management, GBUY can be more judicious in its consumer discretionary allocations and can move more nimbly than index-constrained competitors to capitalize on important consumer trends.

“While the initial consumer spending surge was driven by the reopening theme, we expect another theme to emerge driven by higher income household spending relative to lower income” households,” said UBS analysts in a recent report. “This should support premium/luxury vs value brands too as more consumption moves up the quality scale.”

GBUY has some reopening exposure, but that’s mostly defrayed by a 31.4% allocation to communication services stocks, and while that sector is sagging this year, GBUY’s biggest bets on that sector are mega-cap names with quality attributes.

Focusing on the ETF’s consumer discretionary holdings, several of its components are tethered to the affluent consumer. That group includes Nike (NYSE:NKE), a member of the Dow Jones Industrial Average.

“Nike has the pricing power to pass on higher costs to consumers. The sportswear brand faces challenges from Covid lockdowns in China, but Stifel analysts still reiterated the stock as a buy earlier this month,” reported Sarah Min for CNBC.

Another consumer cyclical name highlighted by CNBC that has exposure to wealthier consumer purchasing trends is Ulta Beauty (NASDAQ:ULTA), which, like Nike, is a top 10 holding in GBUY.

Though not mentioned in the CNBC post, LVMH Moet Hennessy Louis Vuitton SE is the epitome of a stock with affluent consumer exposure. The French luxury goods giant owns 75 brands ranging from Celine to Fendi to Louis Vuitton to Emilio Pucci to Marc Jacobs as well as an extensive portfolio of high-end liquor and wine companies, among other holdings.

In addition to apparel and wine and spirits, LVMH is a luxury leader in cosmetics and fragrances as well as jewelry and watches. The stock is the fifth-largest holding in GBUY at a weight of 5%.

For more news, information, and strategy, visit the Future ETFs Channel.

Loading Articles...
Our Sites
  • VettaFi
  • Advisor Perspectives
  • ETF Trends
Tools
  • ETF Screener
  • Mutual Fund to ETF Converter
  • Head-To-Head ETF Comparison
  • ETF Country Exposure Tool
  • ETF Stock Exposure Tool
  • ETF Database Pro
More Tools
  • Financial Advisor & RIA Center
Explore ETFs
  • ETF News
  • ETF Category Reports
  • Premium Articles
  • Alphabetical Listing of ETFs
  • Browse ETFs by ETF Database Category
  • Browse ETFs by Index
  • Browse ETFs by Issuer
  • Compare ETFs
Information
  • Contact Us
  • Terms of Use and Privacy Policy
  • © 2023 VettaFi LLC. All rights reserved.

Advertisement

Is Your Portfolio Positioned With Enough Global Exposure?

ETF Education Channel

How to Allocate Commodities in Portfolios

Tom LydonApr 26, 2022
2022-04-26

A long-running debate in asset allocation circles is how much of a portfolio an investor should...

Core Strategies Channel

Why ETFs Experience Limit Up/Down Protections

Karrie GordonMay 13, 2022
2022-05-13

In a digital age where information moves in milliseconds and millions of participants can transact...

}
X