The Knight Frank Luxury Investment Index (KFLII) has risen in value by 10% over the 12 months to the end of September, outperforming both the FTSE 100 equities index and the top end of the London residential housing market over that time.
Classic cars (+18%) were again the top annual performer in the index, which tracks the price growth of 10 luxury investment sectors. Art (+15%) and coins (13%) were the only other asset classes to record double-digit growth.
Launched at an event held at the Hong Kong office of Bonhams, the international auction house, the latest edition of Knight Frank’s Luxury Investment Index focuses on the performance of jewellery, which rose by 5% overall over the last 12 months. Overall, jewellery has risen in value by 159% over the past 10 years
Andrew Shirley, who compiles the KFLII, says, “It is no surprise that KFLII outperformed the FTSE 100, gold and the prime central London housing market, as these kinds of luxury investments are becoming increasingly popular with ultra-high net-worth individuals.
“Jewellery in particular could be considered the ultimate asset class. Since the dawn of time humans have been drawn magpie-like to shiny stones, first from the beds of streams and then mined from ever deeper underground. Dispersed around the world by the earliest traders, gems and jewellery have always been an international commodity and store of wealth.”
Nicholas Holt, Head of Research Asia Pacific says, “Property remains the cornerstone of Asian High-Net-Worth Individual’s (HNWIs) portfolios, luxury investments are growing in importance. China accounts for nearly a third of total global luxury spend according to Bain & Altagamma, while Knight Frank’s Wealth Report Attitude Survey shows that in India, 72% of respondents expected luxury spend to increase in 2015. Along with the growth in demand from the region’s two giants, there is also a generational shift, with 61% of younger HNWI clients expected to spend more on luxury goods than their parents’ generation. All of these drivers will continue to ensure that demand for investments of passion remains strong within the region.”
Graeme Thompson, Director of Jewellery for Bonhams Asia, comments, “Without a doubt we are seeing the return of precious coloured stones such as emeralds, sapphires and rubies. Demand is very strong and record prices are being paid. Coloured diamonds continue to perform very well and we see a lot of growth in signed fine jewellery from the 60s and 70s. Jadeite holds a special place in Asia and top quality pieces remain firm favourites among connoisseurs.”
The Knight Frank Luxury Investment Index (to Q3 2015)*
| Luxury asset |
Price Growth |
| 12-month |
5-year |
10-year |
| Cars |
18% |
161% |
496% |
| Art |
15% |
44% |
239% |
| Wine |
7% |
40% |
243% |
| Coins |
13% |
92% |
232% |
| Stamps |
2% |
27% |
166% |
| Jewellery |
5% |
71% |
159% |
| Coloured diamonds |
0% |
42% |
142% |
| Chinese ceramics |
1% |
13% |
62% |
| Watches |
4% |
35% |
67% |
| Furniture |
-6% |
-21% |
-28% |
| KFLII** |
10% |
63% |
206% |
Comparative Assets
| Luxury asset |
Price Growth |
| 12-month |
5-year |
10-year |
| Top end London residential* |
1% |
43% |
133% |
| Gold |
-2% |
-11% |
174% |
| FTSE 100 |
-8% |
9% |
11% |
*Knight Frank Prime Central London Index
**KFLII is weighted based on the contribution of each component
Sources: Art Market Research (Art, Watches, Furniture, Jewellery, Chinese Ceramics); Stanley Gibbons (Stamps, coins); HAGI (Classic cars); Wine Owners (Wine); Fancy Color Research Foundation (Coloured diamonds)