Venture Artistry towards Enduring Prestige

Luxury companies are unique market players of the dynamic economy, due to the relative resilience of their intangible assets and solid cash reserves, which allow them to transcend turbulent economic cycles.

Premier indexes are constructed based on the scientific and systematic compilation, which provide a structured framework for matching and categorizing investment targets. It helps investors and industry professionals grasp market trends easily, identify opportunities and changes. This leads to making great strides toward the future through reliable, focused, prospective analysis and insights.

SCROLL DOWN

Related Insights

Edit Node

24/25 PRMC Luxe Index
Review & Prospect

Edit Node

Luxury Industry Outlook 2025

PRMC Luxe Index Methodology

Eligible Equity Securities Identification

Index Complication

Index Maintenance

Eligible Equity Securities Identification

The equity securities from the Premier Global Investable Company Pool undergo a three-step evaluation process to assess their eligibility for investment in the luxury goods sector. Companies with securities that successfully pass the systematic assessment are added to the global pool of luxury investable companies.

Upon completion of the screening criteria above,
the retained is the global pool of luxury investable companies.

Index Complication

The Index compilation process consists of five specific steps: Global Industry Classification Standard (GICS^®) matching, Sub-Index allocating, company products & services pricing check, industry exposure score & weight setting.

GICS^® Matching

The GICS^® Code of each listed company is matched against the investable companies in the global luxury goods industry. Only the companies with GICS^® codes that align with the listed industries are eligible for inclusion in the Primary Index. Additionally, based on the most recent fiscal year consolidated financial reports published before the latest rebalancing date, the business sub-industry with the highest revenue contribution is identified. This sub-industry is further re-matched with the GICS^® code, and the step is to be completed upon successful verification.

Sub-Index Allocating

Based on GICS^® code matching, each listed company is further allocated to the Sub-Index. The allocation method is based on the Premier Luxury Industry System, which contains two major blocks, namely Luxury Products and Luxury Services.

Products & Services Pricing Check

After completing the Sub-Index classification, a pricing verification of each qualifying company's products or services must be conducted.

Firstly, the relevant brand matrix for the verified primary revenue-contributing business unit of each company is verified. Secondly, the specific products or service categories that correspond to the company’s GICS® code are selected.

For companies categorized under the Ultra Luxe, Core Luxe, and Quasi Luxe Indices (i.e., providing Luxury Products), the listing price for each SKU in their main market's retail stores (excluding discounts and special promotions) is obtained. This listing price is considered to be the local currency sales price for the year. Afterward, the local currency price is converted to USD using the annual average exchange rate. To determine the average market price for the category’s SKUs for the year, the weighted average of the SKU prices is calculated based on the sales revenue in the primary market.

For companies categorized under the Experiental Luxe Index (i.e., offering Luxury Services), the official service prices from the brand's main market website (excluding discounts and special promotions) are obtained. These prices are considered the local currency sales price for the year and are further converted to USD using the annual average exchange rate. To determine the average market price for the service category for the year, the weighted average of the service prices based on sales revenue in the primary market is calculated.

Next, each company’s annual average market sales price is compared with the Global Luxury Benchmark Price Threshold for their respective product or service categories. In case the annual average market sales price meets or exceeds the minimum threshold, the company remains in the corresponding Sub-Index; otherwise, it is excluded. The Global Luxury Benchmark Price Threshold is established by Premier Consulting through comprehensive desk research, industry expert interviews, and consumer studies. It is updated annually on June 30.

Additionally, if a company’s product or service’s annual average market sales price is below the benchmark, however, its features possess luxury attributes for the Premier Index Committee, the company remains in the corresponding Sub-Index.

Industry Exposure Score Setting

After completing the pricing verification for products or services, the Premier Index Committee, in collaboration with industry experts, assigns an industry exposure score to each selected company. The score measures the company's influence within the global luxury goods sector and is linked to the component weight limits to ensure that the Index accurately reflects the overall performance of the global luxury industry.

Weight Setting

The Premier Luxury Goods Index employs a market capitalization weighting method to prevent companies with larger capitalizations from holding excessive weight in the Index, which could affect the overall industry representation. The market capitalization weights for each constituent stock are determined based on the assigned industry exposure scores.

Index Maintenance

The Premier Index Committee regularly updates and optimizes the structure and constituents of the Index to ensure that it accurately reflects the overall state of the global luxury goods stock market. This comprehensive process involves four main aspects: rebalancing, spin-offs, additions, and deletions.

Rebalancing

The Index is rebalanced on an annual basis and is effective after the last trading day of June. The reference date for rebalancing is the last trading day of May. The Index shares are calculated based on the prices from the seven trading days preceding the rebalancing effective date.

Spin-offs

Securities of spin-off companies are incorporated into the Index at zero price on the day before the ex-dividend date, as part of the parent company's securities. The weight of the spin-off company in the Index is determined based on the spin-off ratio. If a spin-off company is confirmed to be ineligible to remain in the Index, it is removed after at least one day of regular trading.

Additions

Companies that meet the screening criteria can be included in the Index during the annual rebalancing.

Deletions

The weight of deleted companies is proportionally redistributed among the remaining Index constituents to ensure that the relative weights of all Index constituents remain unchanged.

Index Maintenance

PRMC Index Committee

The Premier Index Committee is responsible for the maintenance of the Index. All members of the Committee are full-time professionals from Premier Consulting. The Committee holds regular meetings to review and assess various matters. During each meeting, the Committee evaluates potential corporate actions that could impact Index constituents, compares the Index composition with relevant market statistics, considers potential candidates for inclusion in the Index, and addresses any significant market events. Additionally, the Committee has the authority to revise Index policies related to the selection of companies, handling dividends, the number of shares, or other pertinent matters.

The Premier Index considers information regarding changes to the Index and related issues as potential market indicators and material data. Therefore, all discussions conducted by the Index Committee are required to be kept confidential.

The Premier Index Committee reserves the right to make exceptions to the Index calculation methodology when deemed necessary. Any deviations from the general rules outlined in this document or supplementary materials are to be communicated to clients with as much advance notice as possible.

In addition to the daily management of the Index and maintenance of its calculation methodology, the Committee conducts a review of the methodology at least once every 12 months to ensure that the Index continues to meet its objectives, while data and methodology remain effective.