Luxury Investments

Spending on luxury goods and collectables continues to gather pace, according to both our survey of the latest global trends and the new Luxury Opportunity Index

Luxury Investment trends

Africa

%age of wealth advisors who say their clients
will be spending more on luxury goods in 2014
%age of wealth advisors who say thier clients will be
increasing their philanthropic activities in 2014
Favourite investment of passion
46% 38% Jewellery
 

Asia

%age of wealth advisors who say their clients
will be spending more on luxury goods in 2014
%age of wealth advisors who say thier clients will be
increasing their philanthropic activities in 2014
Favourite investment of passion
39% 23% Jewellery
 

Australasia

%age of wealth advisors who say their clients
will be spending more on luxury goods in 2014
%age of wealth advisors who say thier clients will be
increasing their philanthropic activities in 2014
Favourite investment of passion
40% 34% Art
 

Europe

%age of wealth advisors who say their clients
will be spending more on luxury goods in 2014
%age of wealth advisors who say thier clients will be
increasing their philanthropic activities in 2014
Favourite investment of passion
31% 20% Wine
 

Latin America

%age of wealth advisors who say their clients
will be spending more on luxury goods in 2014
%age of wealth advisors who say thier clients will be
increasing their philanthropic activities in 2014
Favourite investment of passion
41% 38% Jewellery
 

Middle East

%age of wealth advisors who say their clients
will be spending more on luxury goods in 2014
%age of wealth advisors who say thier clients will be
increasing their philanthropic activities in 2014
Favourite investment of passion
36% 25% Jewellery
 

North America

%age of wealth advisors who say their clients
will be spending more on luxury goods in 2014
%age of wealth advisors who say their clients will be
increasing their philanthropic activities in 2014
Favourite investment of passion
36% 15% Art
 

Russia

%age of wealth advisors who say their clients
will be spending more on luxury goods in 2014
%age of wealth advisors who say thier clients will be
increasing their philanthropic activities in 2014
Favourite investment of passion
37% 16% Jewellery
 

In last year’s edition of The Wealth Report we introduced the Knight Frank Luxury Investment Index (KFLII).

KFLII combines the performance of nine luxury assets including art, classic cars, watches and stamps, into one composite index.

This year we have updated the index, which, showed growth of 8% in the 12 months to Q3 2013 and 179% over a 10-year period, outperforming many more mainstream investments such as the FTSE 100.

Overall, classic cars have shown the strongest 10-year performance, while furniture has actually fallen in value. See the table below for the performance of the individual segments of KFLII.

The "Pink Start", a 59.6-carat oval cut pink diamond, sold for US$83m

An ultra-rare 1967 ferrari 275 GTB/4 NART spider set a new record for a road-going car when it sold for US$27.5m

A 1794 US silver dollar set a record price for a coin when it fetched US$ 10m at auction in New York.

Fracis Bacon's Three Studies of Lucien Freud set a new record for any artwork when it sold for US$143m at Christies in New York in October.

Bonham's December watch sale included a 1940s Rolex Panerai driver's watch that fetched £56,250, and a 1969 Rolex Daytona which sold for £70,000

Collectors' thirst for the world's finest wines showed no signs of abating. In November, 12 bottles of 1978 Domaine de la Romanee-conti set a new record price of US$476,405 at Christie's in Hong Kong

The Knight Frank Luxury Investment Index (KFLII)

Collectable12-month5-year10-year
Furniture -2% -16% -19%
Chinese ceramics 3% 45% 77%
Watches 4% 32% 82%
Jewellery 3% 49% 156%
Wine 3% 5% 176%
Art -3% 2% 193%
Coins 10% 91% 227%
Stamps 5% 50% 250%
Cars 28% 121% 456%
KFLLI 8% 38% 179%

As well as KFLII, our analysis of luxury spending trends also includes a new Luxury Opportunities Index compiled by Ledbury Research for The Wealth Report.

The index pinpoints the 10 countries with the fastest growing potential for luxury spending in the short and medium term. It tracks the growth in four sectors: Luxury footprint, Wealth Creation, Premium air travel and Economic growth.

Africa scores highly in the index, accounting for five of the 10 locations, but the Middle East takes the top three slots with Qatar in pole position. The US is the only developed nation to feature and there are no Asian countries on the list.

The Luxury Opportunities Index

Rank12-month
1 Qatar
2 UAE
3 Saudi Arabia
4 Ghana
5 US
6 Kenya
7 Nigeria
8 South Africa
9 Zimbabwe
10 Mexico

For more detailed information on the index and other luxury spending trends download The Wealth Report 2014.



MY FAVOURITE INVESTMENT OF PASSION IS…
"To learn something new. In the past few years I’ve done a race car driving course and climbed to Annapurna base camp in the Himalayas"
DR PIPPA MALMGREN

MY FAVOURITE INVESTMENT OF PASSION IS…
"A high-end apartment in London overlooking the Thames"
KAMAL RAHMAN

MY FAVOURITE INVESTMENT OF PASSION IS…
"Art"
ABHISHEK LODHA

MY FAVOURITE INVESTMENT OF PASSION IS…
"Luxury property, gems or cars"
LAWRENCE WONG

MY FAVOURITE INVESTMENT OF PASSION IS…
"My sloop SY Kokomo. I love being on the water"
LANG WALKER

MY FAVOURITE INVESTMENT OF PASSION IS…
"Watches and luxury cars"
TAN SRI A K NATHAN

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