Each quarter, property consultancy Knight Frank releases a report on their Luxury Investment Index, also known as the KFLII. Their index tracks the investment performance of the ten following luxury asset classes: antique furniture, art, cars, Chinese ceramics, coins, coloured diamonds, jewelry, stamps, watches and wine.

Which Asset Class Has Been the Top Performer?

Over the past decade, cars, which are bundled into their own index known as the HAGI (Historic Automobile Group International), have reigned supreme as the KFLII’s top performing luxury asset class with a total growth rate of 289%. However, over the past 12 months cars have been superseded by art and wine, posting growth rates of 25% and 7% respectively. In this time, cars saw a growth of 6%, which is certainly a reputable result good enough for 3^rd place among luxury assets. You can see the full results in the info-graphic below, which breaks down the performance of all ten asset classes over the past twelve months (up until the release of this report), five years, and decade.

Arts Astounding Ascension

As you can see from the info-graphic, art has taken a commanding lead over the past 12 months with a growth of 25%. Key record setting auctions can be attributed to this, such as the sale of the Salvator Mundi by Leonardo da Vinci. This piece, which was known as “the last work by Leonardo da Vinci remaining in private hands,” sold at Christie’s New York last year for $450.3m. Purchased by Saudi Prince Bader bin Abdullah bin Mohammed, this piece now holds the title of the most expensive piece of art ever sold – and does so by a wide margin. Another sale that can be attributed to such growth is of Untitled by Basquiat, which sold for over $110m and holds the record for most expensive work ever sold by an American artist.

Cars Remain Solid, Monterey May Help Future Results

While cars did fall out of the top spot, their growth of 6% is still quite worthy of discussion. Key drivers include milestones like the 50^th anniversary of the Ferrari Daytona and Aston Martin DB1, and the 70^th birthdays of iconic brands Land Rover and Porsche. While 6% is certainly a positive, another important detail to note is that this report was published prior to Monterey Car Week 2018, whose auctions realized of over $371m (the third highest ever) and included multiple record breaking sales. It saw a 1962 Ferrari GTO sold by RM Sotheby’s fetch over $48m, setting the record for most expensive car ever sold at auction. A 1935 Duesenberg SSJ Roadster sold by Gooding & Co. amassed $22m, setting the record for the most expensive American Car ever sold at auction. You can learn more about other notable sales and the full auction results of this year’s Monterey Car Week by reading our recap here. With the market for classic cars performing this way, as time goes on and more records are set, the HAGI very well may see itself ascend the report’s rankings again.

Wine, which took second place in in the KFLII with a 12-month growth rate of 7%, can attribute its success to the ever rising, never satiated global demand for top wines – with the Far East being a main catalyst. Some communes saw their volume decrease as much as 70% due to frost damage, leading to a perfect storm of low supply and high demand.

Jewelry and watches reported growth of 0% and 5% respectively. Notable sales include the record breaking ‘Pink Star,’ a 59.6-carat vivid pink diamond, which was purchased by the Hong Kong jeweller Chow Tai Fook for $71m. A Paul Newman Rolex Daytona also set records after being sold for $17.8m by Phillips.

The Knight Frank Luxury Investment Index is a great tool to measure the luxury investment markets. If you are looking to add to your luxury asset portfolio, Borro Private Finance can help you raise liquidity efficiently and discretely. Contact us at 0800 056 1000 or email us at [email protected]

About the Author

Dylan is the Associate Marketing Manager at Borro Private Finance covering the trends of the luxury asset market.

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