High profile luxury brand Moet Hennessy Louis Vuitton may have just posted its slowest growth figures since 2009, but luxury stocks still offer a lot of upside potential – providing they are picked carefully – according to Daniele Gianera, equity research analyst at Dominion Fund Management.

Moet Hennessy Louis Vuitton is regarded as the benchmark for the entire luxury sector and so its disappointing results suggest that investors should tread with caution. However, as Gianera points out, some luxury segments are more resilient than others amid a macro slowdown.

In light of the slowdown in parts of the luxury sector, Dominion has made its Global Trends – Consumer fund more defensive by reducing the weighting of hard luxury and apparel stocks and focusing more on resilient segments like cosmetics, duty free and Cognac.

These elements of the luxe story, along with perfume and hotels, remain a good bet as they are counter-cyclical, explains Gianera.

One name that Dominion particularly favours is the hotel chain InterContinental, which the firm views as very well positioned in China, which is set for an explosion in travellers over the next three years.

After a sustained boom period over the past few years, fuelled in large part by rocketing Asian wealth, it seems that investors will have to take a slightly more cautious view on the sector. One real consideration is that according to the Lifestyle Index 2012, published by Switzerland's Julius Baer, a basket of 20 luxury goods and services that represent the discretionary purchases of high net worth individuals in Asia rose 8.8 per cent for the year to April. This came in the wake of an 11.7 per cent rise the previous year. 

Mumbai saw the highest price rises, at almost 20 per cent, while Singapore prices saw the slowest growth. The most expensive single item increase was a business class airfare from Mumbai - up 51 per cent - while the largest decrease was also registered in Mumbai - a root canal surgery.