Just a short time until the coronation of King Charles, new research from eToro suggests that retail investors could learn a thing or two from the new monarch’s taste in British brands.
The social trading and investing platform created a basket of 10 UK heritage brands, publicly traded or part of larger listed businesses, which have received a Royal Warrant of Appointment from King Charles.
The ‘eToro Royal Index’ has outperformed the FTSE 100 by 24% over the last five years, and by 62% over the past three years. The index has also beaten the FTSE 100 by 10% year-to-date, though over two years, the trend is reversed, with high-flyers Watches of Switzerland, Hermes (which owns Royal Warrant holder John Lobb), and Frasers taking a performance breather.
The Royal Warrant is granted to companies as a mark of recognition for the supply of goods and services to the Royal Household, and King Charles has granted 181 Royal Warrants to date. The vast majority of these have gone to small, local and family-owned businesses, while far fewer have gone to leading UK brands that are owned by public companies.
The Royal Index is comprised of a combination of luxury listed brands, such as watchmaker Watches of Switzerland (Mappin & Webb), and larger conglomerates with UK heritage brands in their portfolio, for example Newell Brands (The Parker Pen Company).
The best performer in the index over five years has been Hermes, with 281% share price growth. At the other end of the spectrum, Aston Martin shares have fallen 95% in value in the last five years.
Table 1: Performance of the Royal Index versus the FTSE 100 in recent years
| Index | Share price performance year-to-date | Share price performance over two years | Share price performance over three years | Share price performance over five years |
| Royal Index | 16% | 4% | 98% | 32% |
| FTSE 100 | 6% | 14% | 36% | 7% |
| Royal Index vs FTSE 100 | +10% | -10% | +62% | +24% |
*Simple weighted average applied to the 10 stocks making up the Royal Index
Commenting on the data, Ben Laidler, Global Markets Strategist at eToro, said: “The strong price performance of this index shows that heritage and luxury sells, regardless of economic ups and downs. The index, which ranges from rifles and watches to shoes and raincoats, has pretty consistently outperformed the FTSE 100, albeit with only one modest year where some gains were lost.
“The brands included in the index all have unique histories and this has given them an attractive combination of resilient demand and pricing power.”
Table 2: Share price performance of a selection of UK brands (and parent companies) holding a Royal Warrant from King Charles
| Royal Warrant Holder | Listed business | Share price performance over 3 years | Share price performance over 5 years |
| Aston Martin (cars) | Aston Martin Lagonda Global Holdings plc | -48%
|
-95%* |
| Burberry (fashion) | Burberry Group plc | 104% | 50% |
| Royal Doulton (ceramics) | Fiskars Oyj Abp | 54% | 1% |
| Gieves & Hawkes (tailor) | Frasers Group PLC | 250% | 101% |
| Purdey (shotguns) | Richemont GDR | 190% | 64% |
| John Lobb (shoes) | Hermes International SCA | 199% | 289% |
| Mappin & Webb (watches) | Watches of Switzerland Group PLC | 259% | 182%** |
| The Parker Pen Company (pens) | Newell Brands Inc | -5% | -54% |
| Twinings (tea) | Associated British Foods plc | 10% | -20% |
| Shepherd Neame (brewer) | Shepherd Neame Ltd | -20% | -44% |
*Since October 2018 IPO. **Since May 2019 IPO.
