Investing in luxury goods has become a trend among the ultra-wealthy, with some viewing items like fine wines, high-end watches, and unique art pieces not only as possessions but also as potential investments. Examining the performance of various luxury asset classes over the past 10 years, we present insights from the Knight Frank Luxury Investment Index, as revealed in the 2024 Wealth Report. For additional context, we include the 10-year returns of the S&P 500.
Rare Whisky Bottles Lead the Pack, Surpassing the S&P 500 Since 2013
The Knight Frank index utilizes the weighted average of each asset, tracking sales of reference brands and pieces within each category. Here’s how different luxury assets have performed from Q4 2013 to Q4 2023:
- Rare Whisky: +280%
- Wine: +146%
- Watches: +138%
- Art: +105%
- Cars: +82%
- Handbags: +67%
- Coins: +56%
- Furniture: +40%
- Jewelry: +37%
- Colored Diamonds: +8%
- S&P 500: +158%
Over the past decade, rare whisky has emerged as the top-performing luxury asset, experiencing an impressive appreciation of 280%, even surpassing the returns of the S&P 500 index.
Noteworthy auctions have seen record-breaking sales, with collectors demonstrating a willingness to pay exorbitant sums for prized bottles. For instance, in November 2023, a single bottle of The Macallan Valerio Adami 60 Year Old fetched $2.7 million at a Sotheby’s auction, exceeding the initial estimate of $1.5 million.
Fine wine and luxury watches follow closely behind, boasting 10-year returns of +146% and +138%, respectively.
On the lower end of the spectrum, jewelry (+37%), encompassing items like rings and necklaces, and colored diamonds (+8%), including rare pink and blue specimens, recorded comparatively modest returns over the same period.
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