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January 10, 2014 at 08:18 AM
In the wake of the global financial crisis, wealthy investors have sought out more diverse investment opportunities. This demand has increasingly driven interest in assets that have intrinsic value, especially when their supply is limited.
This week, Coutts, a private bank, rolled out The Coutts Index: Objects of Desire, intended to provide the global benchmark for monitoring the performance of these items, which it calls “passion assets.”
Developed in conjunction with Fathom Consulting, the index captures the price return in local currency (net of the holding costs) of 15 passion assets across two broad categories: trophy property and alternative investments.
Alternative investments comprise fine art, precious items and collectibles — fine wine, stamps and coins, classic cars, rugs and carpets, and rare musical instruments.
Coutts reported that the index had risen by 2.8% during the first half of 2013, and by 77% since the beginning of 2005.
Classic cars rose by 257% since 2005, outpacing all other alternative investments examined for the index by more than 80 percentage points over the 7 1/2-year timeframe.
Classic watches rose by 176% from 2005 to June 2013.
Over the same period, jewels in the precious items category returned 146%, while traditional Chinese art was the standout performer in the fine art space, rising 163%.
Coutts said that over the past 7 1/2 years, the index had risen 82% in U.S. dollar terms, while the MSCI All Country Equity Index rose 53% over the same timeframe.
The trophy property component of the Coutts Index, which is supplied by Savills World Research, comprises “billionaire” residential properties in 10 global cities and “leisure” properties in the most desirable leisure destinations associated with those cities.
