Wealth management firm Coutts has released its Passion Index 2017 that tracks the values of fine wine, fine art, luxury properties, classic cars, and other collectibles.
Since 2005, classic cars have been the best investment in terms of total return. For the 12-year period, investments in classic cars have produced a return on average of 331.9%.
That said, returns have been on the decline for the past two years.
The steadiest returns year over year for the same period have been for coins. Returns on average have eclipsed 11%, and have registered increases every single year.
Old Master and 19th Century art produced the worst return on investment, suffering a 42.1% drop since 2005.
“Our bespoke research endeavors to capture the changing values of assets,” says Mohammad Kamal Syed, managing director of Coutts.
And boy have values changed. For example, the average prices for rare musical instruments fell in 2015, but skyrocketed 16% last year—the fastest growth for any category. Meanwhile, returns on investments in rugs and carpets, after remaining relatively steady for a decade, have fallen below 2005 levels.
Other insights from the Passion Index include:
• After four years of contraction, Fine Wines registered strong price growth of nearly 10% in 2016.
• Classic Watch prices have recovered in recent years to stand at over double their 2005 level, yet they remain 10% lower than their 2012 peak.
• Jewelry reached a new high in 2016 growing nearly 12% over a year earlier and up 150% since 2005.
• Traditional Chinese Works of Art has fluctuated, but this is the only category for which prices have risen significantly since the financial crisis, increasing 70% since 2008.
• Billionaire Property prices grew rapidly from 2008 to 2012, increasing nearly 40%, but have since risen less than 6% and increased less than 2% last year.
• Prices of Leisure Property have generally seen smaller increases, rising around 20% since 2008, but have been very consistent, growing close to 1.5% in each of the past three years.
Billionaire properties are defined as primary homes owned by ultra-high net worth individuals, typically valued at $13 million and above. Leisure properties are second houses or holiday homes.
Passion Index values are assessed by calculating returns by individual category indices. Overall, 2016 saw a modest increase in the total index of 1.2%, compared to an average annual increase of 5.3%, while the total index has returned 76.6% since it was founded in 2005.
