Barclays has
published a report exploring the motivations behind treasure trends.
‘Treasure’, like SWAG,
is an alternative asset group, covering physical goods such as wine, art,
jewellery, cars and furniture. The
report looked at physical assets as an alluring financial investment, but also
examined the role that emotions played in the choice of investment and
attachment to the collection.
Strikingly, only 10% of people said they owned wine purely
as an investment (compared to the average of 18%). Wine was primarily collected
for emotional rather than financial benefits: the article later named it one of
the most ‘social’ asset classes, with 69% of people – more than in any other
category – sharing it with friends.
Percentage of
respondents who enjoy sharing treasure with their friends
Wine collections are growing in popularity. Only 21% of
people owned wine five years ago compared to 28% now, making wine the fifth
most popular collection of the ten asset classes. It is also a treasure that
appeals to a younger group of investors, owned by more people under 45 than
over 55. A high 39% of people consider their wine collection ‘priceless’ – one
of the reasons, perhaps, that wine was the collection that people were most
reluctant to get rid of: only 43% said they had plans to de-clutter it in the future
(compared to 57% for antique furniture, which was the highest).
According to the report, wine is one of the three most
popular investment assets in Hong Kong and Singapore (along with jewellery and
coins for the former, and jewellery and art for the latter). People surveyed
from these countries also held more of their net worth in treasure, and were
more likely to own treasure purely as an
investment, with 26% of assets in Singapore held for financial motivation, and
25% in Hong Kong (compared to 9% and 11% in the US and UK respectively).
The report noted that valuation
accuracy is one of the key problems faced when investing in physical assets. Observing that “the fact that valuation can
be so subjective is precisely what makes investing in treasure so risky,
especially if an individual’s motivations are primarily financial”, it went on
to cite the Liv-ex
indices as the means by which to track wine prices. Investors and
collectors can do so through Cellar
Watch.
