08/01/2014
Passion investments do better than equities
“Passion investments” can do better than a classic equity allocation. According to the first edition of an index launched by the British firm Coutts in conjuction with Fathom Consulting, called Coutts Index: Objects of Desire, investments which are related, for example, to a passion for artworks generally earn higher returns than investments in equities. 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 can be further broken down into fine art, collectibles and precious items. Of all the alternative investments Coutts examined for the Index, classic cars have returned the most since 2005, rising by 257%, outpacing all other investments by more than 80 percentage points over the seven and-a-half-year timeframe. Classic watches have also proved they can stand the test of time, rising by 176% from 2005 to 30 June 2013. Jewels returned 146% in comparison, while the standout performer in the fine art space is the traditional Chinese works of arts sector, which rose by 163% between 2005 and 30 June 2013. Over the past seven and a half years, the Coutts Index, based in USD terms, has risen by 82% – over the same period, the MSCI All Country Equity Index has risen by 53%, based in USD terms.
