If you like putting your money into art, or watches or handbags or whiskey, you’ll have likely seen your investments perform better than traditional equities last year – as well as getting the pleasure of admiring your purchase.
The Knight Frank Luxury Investment Index, which tracks the value of 10 “investments of passion”, rose by a strong 16 per cent last year, beating both inflation as well as more mainstream equities. The S&P 500, for example, an index of the larger US public companies, fell by 20 per cent in 2022.
Over 10 years the passion index has returned 137 per cent.
Art was the standout performer last year, with values rising by 29 per cent, down to “stellar prices paid for museum quality works of art by ultra-wealthy collectors”.
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Some of the big sales during the year included that of the late Microsoft founder Paul Allen who raised a staggering $1.5 billion when part of his collection, which included five dozen works from Paul Cézanne, Vincent van Gogh and other revered artists, was sold at auction in November.
The most expensive painting sold was Andy Warhol’s Shot Sage Blue Marilyn which made $195 million in May, becoming the most expensive 20th-century painting sold.
Classic cars also revved up their performance last year, with the research showing that values rose by 25 per cent, the strongest finish for nine years. Records included the $143 million paid for a Mercedes-Benz Uhlenhaut Coupé – the most expensive car sold.
Watches were another strong performer, with values advancing by 18 per cent during the year, as 40 watches sold for more than £1 million – 12 more than the previous year. However, as the report notes, it’s not a case of any watch doing well, even those by prestige brands. Indeed the top sales were dominated by three designs: Patek Philippe Nautilus, Audemars Piguet’s Royal Oak and the Rolex Daytona.
Handbag lovers, particularly those of the famed Hermès brand, saw the value of their bags increase by 15 per cent, with top sales including the $353,000 achieved for the Hermès Himalaya Crocodile Kelly bag at Sotheby’s.
Oenophiles, especially those who don’t like to drink their purchases, also did well last year, with Knight Frank’s wine index recording growth of 10 per cent, although the rate of growth did slow from the 16 per cent recorded in 2021.
Diamonds were everybody’s friend with some standout sales during the year including the Williamson Pink Star, an 11.15ct vivid pink diamond ring, which considerably outperformed its estimate of $21 million by selling for $57.7 million in October.
Whiskey on the other hand was one of the weaker performers last year, with growth of just 3 per cent.
