The stock that benefits the new beauty trend

The changing industry of ‘beauty’ is one manifestation of this demographic tailwind. A fast-growing industry with highly profitable companies that benefit from this significant demographic shift globally.

The difference is skin deep. A key to younger generations' beauty preferences is indeed skin deep. When asked in a survey whether they’d rather spend their money on skincare or makeup, 56.9 percent voted in favor of the former. Gen-Z and Millennials have skin on the mind even where makeup is concerned.


The majority actively look for makeup products that are protective of their skin as much as they are fashionable. Housing ingredients such as aloe and SPF rates highly for them as skincare is all about the “self-care.”


Self-Care is the new beauty trend. In fact, much of skincare’s expansion is thanks in part to the growing popularity of self-care, a lifestyle that promotes health via emotional and mental wellbeing. Pandemics may slightly interrupt a Megatrend but rarely change it much over time. This is one example where the companies well positioned on social media and on-line are overcoming the lack of footfall into city centres. Adaption in action.


A stock we have held for over 4 years as a major beneficiary of demographic shifts to younger generations

Estee Lauder has been a holding in our portfolio for 4 years. It is a principal beneficiary of the Gen-Z & Millennials Megatrend (amongst other Megatrends).


Covid-19 has not changed the long-term growth opportunity in the beauty industry providing a level of resilience. They are particularly well positioned in skin care which is a high margin business; one that helps it deliver very high levels of profitability. This year has seen its skin care products even being used by astronauts in space.


Since the lockdown, consumers have been shopping more online (especially those in the 50+ age cohort) and skincare routines are broadening. Also, with the millennial generation getting older and make-up serving as a recruitment tool for skin care, we believe the accelerating growth trend in prestige skin care is here to stay.


As skin care requires more research and development than other beauty products, customers tend to remain loyal to larger brands they know and trust. This stock and its management team continues to fulfill our expectations.


#performance #megatrends #disruption #futurefocused

Disclaimer

Equity Trustees Limited (“EQT”) (ABN 46 004 031 298), AFSL 240975, is the Responsible Entity for the Insync Global Quality Fund and the Insync Global Capital Aware Fund. EQT is a subsidiary of EQT Holdings Limited (ABN 22 607 797 615), a publicly listed company on the Australian Securities Exchange (ASX: EQT). This information has been prepared by Insync Funds Management Pty Ltd (ABN 29 125 092 677, AFSL 322891) (“Insync”), to provide you with general information only. In preparing this information, we did not take into account the investment objectives, financial situation or particular needs of any particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Neither Insync, EQT nor any of its related parties, their employees or directors, provide and warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it. Past performance should not be taken as an indicator of future performance. You should obtain a copy of the Product Disclosure Statement before making a decision about whether to invest in this product.

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Disclaimer

The rating contained in this document is issued by SQM Research Pty Ltd ABN 93 122 592 036 AFSL 421913. SQM Research is an investment research firm that undertakes research on investment products exclusively for its wholesale clients, utilising a proprietary review and star rating system. The SQM Research star rating system is of a general nature and does not take into account the particular circumstances or needs of any specific person. The rating may be subject to change at any time. Only licensed financial advisers may use the SQM Research star rating system in determining whether an investment is appropriate to a person’s particular circumstances or needs. You should read the product disclosure statement and consult a licensed financial adviser before making an investment decision in relation to this investment product. SQM Research receives a fee from the Fund Manager for the research and rating of the managed investment scheme.