Emles Advisors LLC is a relatively new asset management firm with a half-dozen niche-targeted exchange-traded funds that track in-house indexes, including two products that debuted Monday. It’s also run by a CEO who launched the first index tied to master limited partnerships, co-founded a Hollywood film production and distribution company, and is a big believer in the investment potential of beer.

Regarding ETFs, Emles’ newest products—the Emles Luxury Goods ETF (LUXE) and Emles Protective Allocation ETF (DEFN)—seemingly represent two different mindsets: The first hopes to cash in on the urge to splurge, while the latter embodies the desire to play defense when times get tough.

LUXE invests in companies tied to the consumption of luxury goods across a range of sectors including alcohol, apparel, athleisure, beauty, home, jewelry and vehicles. These companies get at least 50% of their revenue from the sales and consumption of luxury goods globally.

But that prompts the following question: What exactly constitutes “luxury”?

“There is no particular definition for it. It’s more of, ‘I know it when I see it,’” said Gabriel Hammond, co-founder and CEO of Emles Advisors. “Some are more intuitive, such as LVMH and Hermès.” Those are French luxury goods companies.

But Hammond and his team also put so-called aspirational brands such as Nike and Apple into the luxury category. Their reasoning is that while Nike sneakers and Apple phones seem like products for the masses, their expensive price points mean that many people who aspire to get them have to give up something in order to purchase these status brands.

In a nutshell, the LUXE fund is all about the consumer discretionary sector. It charges an expense ratio of 0.60%, which might lead some investors to opt for a cheaper offering such as the Consumer Discretionary Select Sector SPDR Fund (XLY) or Vanguard Consumer Discretionary ETF (VCR), which charge 0.13% and 0.10%, respectively.

The top holdings in the SPDR and Vanguard funds—which are the two largest in the consumer discretionary category—include plebeian companies such as Home Depot, McDonald’s, off-price retailer TJX Companies and Dollar General. Both funds count Nike as a top holding.

The LUXE fund’s top holdings include Tesla, Nike, Diageo, Estée Lauder, Daimler AG and Hermès.

The Emles Protective Allocation ETF is designed to provide strong returns during stable conditions and solid absolute returns in periods of market stress by providing exposure to securities thought to preserve capital and survive a long economic downturn.

Its index is weighted about 55% to corporate credit securities and roughly 35% to equity securities. The remaining 10% or so is spread across put options, commodities-linked futures contracts and Treasury Inflation-Protected Securities.

According to the prospectus, the corporate credit and equity securities in the index go through a proprietary scoring methodology that looks at the companies’ balance sheet strength, earnings cadence and debt paydown ability, among other factors. Put options, futures contracts and TIPS are viewed as defensive securities to dampen market stress.

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