LVMH is the world’s top luxury conglomerate with familiar brands such as Louis Vuitton, Dior, Hennessy, Sephora, DFS and many others under its umbrella.
Over the past 10 years, shareholders were rewarded with >550% growth (or CAGR of about 17%). Its success has also propelled its founder, chairman and CEO, Bernard Arnault into the list of richest people on earth. Alvin analyzed their business previously, you can read it here.
In this article, I’ll assumed that you have done your research and are planning to purchase the stock.
LVMH is publicly listed in Paris under the ticker, $MC. Alas, not everyone has access to the European markets. Fret not for you’ll find two tickers for LVMH trading in the US. They are LVMHF and LVMUY.
This leads us onto the next question:
What is the key difference between LVMHF and LVMUY?
The key difference between LVMHF and LVMUY is in their share representation: LVMHF represents 1 ordinary share of LVMH while LVMUY represents 1/5 of a LVMH share and trades in USD.
Both LVMHF and LVMUY are pegged to the Euro share of LVMH (MC) and both counters are Over-The-Counter (OTC) securities that trade via a broker-dealer network instead of having the stock list on the exchange.
However, there are differences in their structures. For example, LVMUY is an unsponsored ADR Level I that trades on the OTC markets. Due to its structure, each share of LVMUY represents only 1/5 of a LVMH share.
In a nutshell, here’s the key differences to note:
| LVMHF | LVMUY | |
|---|---|---|
| Trades on | OTC Markets in the US | OTC Markets in the US |
| Ticker symbol | LVMHF | LVMUY |
| Represents | One ordinary share | One-fifth of a share |
| Currency | US Dollar (USD) | US Dollar (USD) |
| 10 day average volume | 1.15k | 163.51k |
On the flip side, they share many similarities:
- Market Cap: LVMHF is at US$453.59B while LVMUY is at US$453.24B
- Price / Earnings Ratio: LVMHF is at 27.55 while LVMUY is at 27.54
LVMHF vs LVMUY: Which has better liquidity?
tl;dr LVMUY offers greater liquidity than LVMHF.
Liquidity is a key consideration because you’ll want a stock that can be bought and sold easily and quickly. I used trading volume as a signal of the stocks’ liquidity.
At the point of writing, LVMHF’s 10 day average trading volume is 1.15k while LVMUY’s 10 day average trading volume is 163.51k. This suggests that LVMUY has greater liquidity as more trades are being made for this ticker.
| LVMHF | LVMUY | |
|---|---|---|
| 10 day average trading volume | 1.15k | 163.51k |
| 3 month average trading volume | 2.27k | 197.78k |
LVMHF vs LVMUY: Why is there a price difference?
As mentioned above, LVMHF represents 1 ordinary share of LVMH while LVMUY represents 1/5 of ordinary share of LVMH. Given the difference in share representation, it is not surprising for LVMUY to trade lower than LVMHF.
At the point of writing, LVMHF is trading at US$908 while LVMUY trades at US$181.46 (which is close to 1/5 of LVMHF’s price).
LVMHF vs LVMUY: Are there price tracking differences?
tl;dr. not really.
Despite the difference in share representation, we can see that the price tracking of both LVMHF and LVMUY are pretty similar.
As you can see, over the past 5 years, the performance of LVMHF and LVMUF are pretty close with only a 1% variance.
There is a wider difference between LVMHF and LVMUF against the Paris listed MC stock, this could be due to a variety of factors from trading hours to currency exchange rates.
LVMHF vs LVMUY: What is the better stock to own?
LVMUY offers greater liquidity with little to no price performance difference against LVMHF, making it a more attractive ticker at the point of writing.
Of course, if you want to own LVMH shares directly, you can invest in the Paris listed LVMH ticker, MC. Do note that MC is traded in Euros, and there may be additional currency risk involved.
You should note that some brokers may charge an extra fee for trades involving OTC counters. Commission rates and misc fees for stocks trading on different exchanges would vary as well. Do check with your brokers to fully understand your cost of investing in LVMHF and LVMUY.
tl;dr. LVMH’s 3 tickers
- MC: This is the publicly listed LVMH stock that trades on the Euronext Paris (EPA) stock exchange in Euro.
- LVMHF: This is an OTC counter that represents 1 ordinary share in LVMH. Trades in the US OTC markets.
- LVMUY: This is an OTC counter for LVMH that represents 1/5 share in LVMH. Trades in the US OTC markets.
How else can I invest in LVMH?
If buying OTC counters feels unfamiliar and uncomfortable, you can consider ETFs that provide exposure to LVMH as well.
Keep in mind that the overall returns would differ depending on the underlying portfolio of the ETF that you’re vested in.
Nice article