Millionaire ETF
Carl Delfeld, President of ChartwellETF.com and Global Investment Strategist for
New England Research & Investment
Before investors jump to the conclusion that consumer spending is falling off a cliff, check out the data from a recent study of global wealth by Boston Consulting Group. Here are some highlights as well as an exchange-traded fund to take advantage of this explosion of wealth.
The U.S. had, by far, the highest number of millionaire households, with nearly 4.6 million, and the highest number of $100 million-plus households, with 2,300. The number of millionaire households increased by a steady 10%, while $100-million-plus households grew by 7%. The number of millionaire households increased the most last year in China (up 39%), Spain (up 32%), and Britain (up 30.5%). Mr. Carlos Slim of Mexico is likely the wealthiest man in the world with a net worth goes up $52 million a day!
The United Arab Emirates and Switzerland led the ranking for highest density of millionaire households, with millionaire households accounting for 6.1% of all households in each country—almost nine times the global average. In Europe, the number of millionaire households grew by 26.4% in 2006, the highest of any region in the study, helped by its strong currency against the weakening U.S. dollar. As of 2006, the U.S. held about 40% of the world's wealth and 50% of its millionaire households, according to the Boston Consulting Group.
Barclays Wealth research also sheds some light on how different nationalities view taking risk as a key reason for their wealth accumulation. The research survey indicates that 84% of investors questioned in South Africa believed a high appetite for risk had helped achieve their riches. In the UK, only 25 per cent of those surveyed put their wealth down to a willingness to take investment risk. Those surveyed in Singapore, Dubai and Hong Kong also had a high appetite for risk
Barclays believed this reflected a “burgeoning entrepreneurial culture” in South Africa while in the UK, US and Canada, people were more likely to achieve wealth through inheritance, marriage or a good salary.
Investors looking for a way to play this trend should consider the Claymore/Robb Report Global Luxury exchange-traded fund (ROB).
This research is important because roughly 60% of total US spending is by the top 20% income earners. Their purchasing power is unlikely to pull back sharply. Second, the growth rate of wealthy individuals from emerging nations is absolutely staggering and they want the best.
This ETF will hold from twenty to one hundred securities of firms that cater to the wealthy including retailers, manufacturers of automobiles, boats, aircraft, and consumer electronics as well as travel and leisure firms, and investment and other professional services firms. It currently has 42 firms in its basket and 72% of them are domiciled in the U.S., France and Switzerland.
Here are the top ten current holdings in the ETF and their weighting.
DAIMLERCHRYSLER AG NPV(REGD) 5.48 %
GOLDMAN SACHS GROUP INC 5.16 %
LVMH MOET HENNESSY LOUIS VUITTON 5.11 %
COMPAGNIE FINANCIERE RICHEMONT-UTS 5.08 %
PPR SA 5.03 %
BAYERISCHE MOTOREN WERKE AG (BMW) 4.87 %
PERNOD-RICARD SA 4.78 %
CHRISTIAN DIOR SA 4.69 %
UBS AG 4.53 %
CREDIT SUISSE GROUP 4.37 %
I am adding 5% allocation to (ROB) to the Global Opportunity ETF portfolio.
