Tue, Oct 28, 2014

Art & Auctions
Collectibles ‘can outperform mainstream assets’

Collectable investments of passion can still outperform more mainstream asset classes, according to the latest results from the Knight Frank Luxury Investment Index (KFLII), which rose by six per cent over the 12 months to June.

The value of the index, which tracks a portfolio of nine collectables, grew 44 per cent during the past five years and 182 per cent over the last decade.

This compares with a 10 year rise of 135 per cent by the top of the luxury London residential market. Only gold, with growth of 254 per cent, has done better, but its performance has been far more volatile.

"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,” said Knight Frank's Andrew Shirley, who compiled the index.

"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,” Shirley added.

“Budding collectors hoping for investment returns also need to do a huge amount of research,” advised Shirley.

"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,” Shirley explained.

"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 marquees, such as Porsche or Ferrari, will vary over time,” Shirley concluded.

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