New data from Knight Frank‘s 2022 Wealth Report charts the performance of luxury investments – from watches to wine, property and other asset classes
Fine wine and collectible watches saw the highest growth among luxury investments in 2021, with both growing by 16 per cent in the past year.
The Knight Frank Luxury Investment Index, published in the 2022 edition of the property firm’s Wealth Report, found that on average the index grew by nine per cent in 2021 — its strongest overall performance since 2018.
‘The Covid-19 pandemic certainly hasn’t dented the enthusiasm of collectors who have continued to pay significant amounts of money for an increasingly eclectic mix of assets including basketball sneakers, comics and even meteorites,’ said Andrew Shirley, editor of The Wealth Report at Knight Frank.
The strong performance of wine and watches follows a decade of significant growth for the two asset classes.
‘There has been a new wave of investment money coming into the wine market, some of it led by macro factors, such as inflation worries — with wine being seen as a hedge — but also more localised factors such as supply shortages due to weather conditions, particularly frost, and supply chain issues,’ said Miles Davis of data supplier Wine Owners.
Meanwhile, fine art made a strong recovery. After falling by 11 per cent in 2020, the asset saw 13 per cent growth in 2021. Sotheby’s declared record sales of $7.3 billion, and Christie’s a five-year high of $7.1 billion. Rare whisky too, saw strong performance in 2021 after a slight fall in 2020, following a decade of extremely high growth for whisky as a luxury investment.
Knight Frank’s attitudes survey, which consults over 600 private bankers, wealth managers and private offices, found that globally, a quarter of wealth advisers said their clients had increased their spending on passion investments in 2021, a similar proportion to 2020. The biggest increase was in Australasia where almost 40 per cent of respondents said their clients had increased their allocation to passion investments.
Globally, art remains the most popular passion investment for HNWs and UHNWs, according to wealth advisers. In the UK and Europe, wine and watches are more popular, while in North America and Asia investors are more likely to opt for fine jewellery.
Read more coverage of the 2022 Knight Frank Wealth report at Spear’s
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