NEW YORK (

TheStreet

) -- Fashion Week in New York concludes this week, with the optimism of fashion houses reflected in a larger luxury apparel event than last year.

The ETF that best tracks the success of companies in the high-end apparel industry and the broader luxury sector is

Claymore/Robb Report Global Luxury Index ETF

(ROB)

.

Fashion exposure in the top 10 holdings of ROB comes from

Polo Ralph Lauren

(RL) - Get Report

and Moet Hennessy Louis Vuitton, which each account for 4.5% of the fund.

There's much more to ROB than apparel though.

The top holding in the ETF is the Swiss watch company Swatch Group, which receives a 6.0% allocation. Luxury carmakers

Daimler

(DAI)

,

Bayerische Motoren Werke

(also known as BMW), and

Porsche

account for a combined weighting of 10.7%.

Small jet manufacturers such as the Brazilian company

Embraer

and the French firm

Dassault Aviation

account for a further 6.2%, while high-end hotels Mandarin Oriental, Shangri-La, and

Wynn Resorts Ltd.

(WYNN) - Get Report

have a combined weighting of 8.4%. The fund even allocates 3.3% to

Northern Trust

TST Recommends

(NTRS) - Get Report

, an asset management firm catering to wealthy families.

Ultimately, the outlook for these and the other luxury companies in ROB will depend on the sustainability of the global economic recovery.

The recovery of 2009 saw many luxury companies outperform the market and ROB increased by 48.7%, well ahead of the 26.3% gain in

SPDR S&P 500 Index

(SPY) - Get Report

. As shoppers become more convinced that a double dip recession is not going to occur, the outlook for luxury companies will continue to improve, although some foresee trouble for the industry.

Reflecting concerns were shares of

Coach

(COH)

, which dropped after earnings were reported during the pessimistic market environment that characterized the second half of January.

Revenue for the company was better than expected for the previous quarter, but domestic comparable sales missed analyst predictions. Goldman Sachs then downgraded the company in early February from "buy" to "neutral," citing an end to the luxury recovery for now.

The outlook is not uniformly gloomy though, and there is positive information coming from other parts of the sector.

Department store

Nordstrom

(JWN) - Get Report

, a 4.2% holding of ROB, says that it is under-inventoried after strong sales in late 2009 and retail research firm Retail Metrics Inc. is quoted by

Bloomberg

as saying that apparel sales and department store sales in January increased by 8.0% and 2.7%, respectively.

When department stores see declining inventories, it is bullish for the luxury goods companies that the stores buy products from. Even if consumer sales for luxury goods in the first quarter of 2010 are slower than in late 2009 as Goldman Sachs alludes to, the companies in ROB that produce apparel, jewelry, and accessories will see a boost as high-end department stores seek to replenish inventory.

Many consultants and luxury industry executives are also optimistic about growth in 2010 as companies adapt, offering more items at the lower price range while raising prices and exclusivity for their top-tier items.

Also, with 60% of the companies in ROB from euro-zone countries, the continued weakness in the euro against the U.S. dollar will boost sales for these companies in the U.S. Countries that peg their currency to the dollar, most notably China, will also buy more luxury goods from the euro-zone as their purchasing power increases. The yen has strengthened against the euro as well, so stronger sales will come from Japan too.

Investors should take note that volume for ROB is somewhat lower than what I am comfortable with, but liquidity is sufficient enough to support entry and exit of the fund with smaller orders.

-- Written by Don Dion in Williamstown, Mass.

At the time of publication, Dion has no holdings in any of the equities mentioned.

Don Dion is president and founder of

Dion Money Management

, a fee-based investment advisory firm to affluent individuals, families and nonprofit organizations, where he is responsible for setting investment policy, creating custom portfolios and overseeing the performance of client accounts. Founded in 1996 and based in Williamstown, Mass., Dion Money Management manages assets for clients in 49 states and 11 countries. Dion is a licensed attorney in Massachusetts and Maine and has more than 25 years' experience working in the financial markets, having founded and run two publicly traded companies before establishing Dion Money Management.

Dion also is publisher of the Fidelity Independent Adviser family of newsletters, which provides to a broad range of investors his commentary on the financial markets, with a specific emphasis on mutual funds and exchange-traded funds. With more than 100,000 subscribers in the U.S. and 29 other countries, Fidelity Independent Adviser publishes six monthly newsletters and three weekly newsletters. Its flagship publication, Fidelity Independent Adviser, has been published monthly for 11 years and reaches 40,000 subscribers.