Collectable investments of passion can still outperform more mainstream asset classes, according to the latest results from the Knight Frank Luxury Investment Index (KFLII)
The value of the index, which tracks a portfolio of nine collectables, rose by 6% over the 12 months to the end of June 2014. Growth during the past five years has been 44% and over the past 10 years 182%.
This compares with a 10 year rise of 135% by the top of the luxury London residential market. Only gold, with growth of 254%, has done better, but its performance has been far more volatile.
| Capital appreciation of KFLII and other asset classes | |||
| 12-month | 5-year | 10-year | |
| Furniture | -8% | -22% | -24% |
| Watches | 3% | 49% | 65% |
| Chinese ceramics | -2% | 43% | 67% |
| Jewellery | 0% | 39% | 163% |
| Stamps | 3% | 34% | 195% |
| Coins | 10% | 90% | 221% |
| Art | 5% | 17% | 226% |
| Wine | 3% | 45% | 226% |
| Cars | 25% | 111% | 469% |
| KFLII (weighted) | 6% | 44% | 182% |
| Gold | -2% | 36% | 254% |
| Luxury London homes | 8% | 66% | 135% |
| FTSE 100 | 9% | 59% | 51% |
Knight Frank’s Andrew Shirley, who compiles the index, comments:
“This strong growth shows why collectables such as art, classic cars and stamps, are increasingly being seen as an investment as well as just something desirable to own.
However, Andrew adds:
“People should not automatically assume that everything will go up in value, particularly sectors where fashion and tastes change.
“Antique furniture, for example, has seen its value consistently eroded over the past 10 years, mainly because it no longer fits with the contemporary design aesthetic of modern homeowners.”
Budding collectors hoping for investment returns also need to do a huge amount of research, advises Andrew.
“Our index can give an idea of a how a particular asset class such as art might be performing, but it will only reflect a slice of the market.
“The HAGI classic car index that we use, for example, tracks the performance of the world’s most desirable cars. Not every old car will have risen in value to the same extent.
“Even at the top of the market, the performance of the different marques, such as Porsche or Ferrari, will vary over time.”