France has been mired in turmoil for months, as president Emmanuel Macron’s push to boost the pension age led to widespread protests . However oddly, the French inventory market has been climbing, thanks partially to high-end shoppers in China and a seemingly insatiable demand for all issues Cartier, Dior and Chanel. The iShares MSCI France ETF (EWQ) is nearing an all-time excessive, and Strategas Securities’ ETF and technical strategist Todd Sohn stated in a notice to purchasers that the fund is getting a lift from its giant proportion of luxurious items corporations, which give buyers a extra secure option to guess on China’s financial reopening after its Zero Covid slowdown. “There’s loopy volatility with Chinese language markets, as a result of they refuse 20-40% in any given yr. And so if I do not wish to cope with that, if I am unable to abdomen it, let me play a spinoff of it, and France, in a means, is the easiest way to do this,” Sohn advised CNBC. For instance, the most important holding in EWQ is LVMH Moet Hennessy — Louis Vuitton , which reported that 16% of its income got here from Asia ex-Japan in 2022 , down from 30% in 2019 , earlier than the pandemic. With China’s reopening gaining steam this yr, Paris-traded LVMH has jumped by 29%, making its chairman and CEO Bernard Arnault the world’s richest man . LVMH accounts for about 13% of the EWQ. Different giant luxurious holdings within the ETF embrace cosmetics maker L’Oreal and ladies’s scarves and silk accent firm Hermes Worldwide . These shares have helped push up the EWQ greater than 14% this yr to ranges not often seen in its historical past. The fund is threatening to high its all-time closing excessive, set again in November 2021, in line with FactSet information. That rally barely topped a earlier excessive from 2007. EWQ ALL mountain The iShares MSCI France ETF is buying and selling at near its all-time excessive. “You have been, in a means, rangebound for 15 years now,” Sohn stated. To make sure, the outsized rallies for luxurious shares — and new highs for the fund — is also an indication {that a} reversal is close to, a minimum of within the short-term. Nevertheless, Roth MKM chief market technician JC O’Hara stated in a notice to purchasers on Sunday that it seems that luxurious shares nonetheless have room to run. “We first highlighted the power of the Luxurious Items market in early December. Since that point, the S & P International Luxurious Items Index has risen +13%, versus the S & P 500, +1.8%. We proceed to favor the technical setup of most of the luxurious good charts,” O’Hara wrote. Traders might actually purchase a few of the particular person luxurious names on their very own. However from an ETF perspective, the EWQ — with an expense ratio of 0.53% — is likely to be the neatest choice for U.S. buyers even when it isn’t a pure play, in line with Sohn. What’s extra, not all French luxurious items shares commerce within the U.S. “If you wish to get publicity, the France nation ETF is the easiest way, as a result of in any other case you are enjoying Europe regional ETFs or worldwide high quality ETFs, they usually’re extra watered down. There is no good thematic option to play these luxurious names,” Sohn stated. — CNBC’s Michael Bloom contributed to this report.