A hypothetical “Miranda portfolio” composed of luxury goods companies with strong brand heritage would have generated a 629% return over 20 years, outperforming both the S&P 500 and the S&P Global Luxury Index.
Hermès delivered the strongest performance in the basket, with a 2,206% return over the period, despite weaker short-term results.
In recent weeks, luxury stocks have come under pressure as the conflict in the Middle East has weighed on tourism and demand across the sector.
Cerulean blue was never just a colour. It represented something much larger than fashion: the way decisions made at the highest levels of the market eventually shape the purchasing choices of a broad consumer base. Ahead of the release of The Devil Wears Prada 2, investment platform eToro applied the same concept to investing.
eToro created a hypothetical “Miranda portfolio” consisting of established luxury companies. The portfolio — which was not actually held or traded, and whose performance is purely illustrative — would have generated a 629% return since the release of the first film in 2006. This compares with 442% for the S&P 500 and 297% for the S&P Global Luxury Index.
The data suggest that a selective approach in the style of Miranda Priestly has historically supported above-average returns in the luxury goods sector.
The portfolio includes Hermès, Richemont, L’Oréal, Kering, Burberry, Christian Dior and Ralph Lauren. Over 20 years, Hermès delivered the highest return at 2,206%. Christian Dior gained 467%, Ralph Lauren 525%, Richemont 619%, and L’Oréal 344%. At the other end of the spectrum were Burberry, with 92%, and Kering, with 149%, confirming that stock selection remains a key factor.
“If Miranda had built a portfolio in 2006, she would not have chased novelty or short-term momentum. She would have focused on brand heritage, uniqueness and brand strength independent of current trends. This approach is consistent with the factors that have historically driven long-term outperformance in luxury equities,” said Lale Akoner, Global Market Strategist at eToro.
“The strongest companies in this sector behave more like businesses generating compounded value growth than classic cyclical assets. They share a distinctive set of characteristics: strong pricing power, limited supply and the ability to ignore short-term market trends. Hermès rarely discounted. Ralph Lauren was seen by the fashion industry for years as unfashionable. L’Oréal sold the same products through every economic cycle. These may not be exciting short-term investment stories, but over the long term they have shown significant resilience,” Akoner added.
The short-term picture is more mixed, underlining the sector’s sensitivity to macroeconomic conditions. Over the past 10 years, the basket generated a 194% return, compared with 238% for the S&P 500. Over five years, it rose by 33%; over three years by 11%; and over one year by 28%.
Akoner noted that the luxury goods sector is often treated as a single investment theme, but in practice it requires a highly selective approach. The performance gap between the strongest and weakest companies is significant and reflects differences in brand positioning, operational efficiency and exposure to aspirational consumers versus the ultra-luxury segment.
In shorter timeframes, however, the sector behaves more like a traditional economic cycle. Demand is sensitive to global liquidity, consumer confidence and tourism flows, particularly in key markets such as the United States and China. This helps explain recent performance volatility despite the strength of brand fundamentals.
Over the long term, the strongest heritage brands have demonstrated an ability to maintain pricing, preserve exclusivity and defend margins across different phases of the economic cycle. For consumers, these are brands associated with handbags, cosmetics, trench coats and polo shirts. For retail investors, they can represent a source of stable, compounded value growth — provided stock selection remains disciplined.
With The Devil Wears Prada returning, the investment conclusion is simple: hype attracts attention, but durability generates returns.
