The respected real-estate consultancy Knight Frank has released its 2016 Wealth Report, and the news continues to be bullish for rare coins, but not so bullish in the short-term for ultra-high-net-worth individuals.
Slowing growth trends around the world apparently have affected the number of ultra-high-net-worth individuals (or UHNWI) created in 2015, Knight Frank reported. Almost 6,000 people dropped out of the UHNWI wealth bracket in 2015 a 3% slide. This downward shift reflected slower economic growth and the more volatile financial climate, it noted. The rate of global economic growth slowed in 2015, while growth in equity, commodity and other asset prices also decelerated.
First annual UHNWI dip since crisis: A UHNWI is defined as a person with $30 million or more in assets. Meanwhile, the number of plain old millionaires also fell in 2015. Still, Knight Frank expects the populations of UHNWIs and millionaires to grow over the longer term, especially in Asia, but for now the global slowdown has clearly impeded the increase in membership of this exclusive club.
Despite longer-term growth, data from 2015 shows the first annual dip in the global ultra-wealthy population since the financial crisis, Knight Frank researcher Grainne Gilmore said. Last year, only 34 out of the 91 countries for which individual data is compiled saw a rise in the numbers of UHNW individuals.
Luxury-collectibles index up 7%: As for the investments of the ultra-rich, luxury collectibles continue to draw big money and also provide solid returns. While the major stock indexes around the globe began to struggle for instance, Londons leading index the FTSE 100 fell 5% in 2015 Knight Franks Luxury Investment Index rose by 7% last year. The index tracks the performance of 10 high-end asset types: antique furniture, Chinese ceramics, watches, colored diamonds, jewelry, stamps, art, wine, classic cars, and rare coins.
Classic cars continued to lead the way in 2015, gaining 17% on the year. Numismatic coins, however, grabbed second place with a 13% advance. Fine wines and watches tied for third place, logging 5% increases. Art, which so often grabs headlines about record prices, only managed to yield a 4% rise in 2015, tying with jewelry.
Numismatics return 232% over decade: For the longer term, rare coins solidified their top-tier status among luxury investments by finishing second behind classic cars over a five-year period: Vintage autos returned 162%, while coins gained 92%. And over a 10-year period, coins finished in third place with a 232% increase in value, versus 241% for wine and 490% for classic cars.
The overall Knight Frank luxury index has returned 56% over five years and 200% over the past decade.
Emerging markets to fuel collectibles market: The growing preponderance of low and even negative interest rates worldwide should keep the ultra-rich quite focused on investing in hard assets and high-end collectibles.
Theyre already pouring their money into massive yachts. Sales of luxury vessels longer than 24 meters soared 40% in 2015, according to the Wealth Report.
Overall, the future looks healthy for coins and collectibles in general, especially as incomes grow in China, India, and other parts of Asia. As Knight Frank noted, As individuals in emerging markets become wealthier, we expect to see the number of collectors increase. Not only do collectables represent a safe asset investment, they are a way of illustrating status and a sense of having arrived.
For more information about high-net-worth individuals, including their views about estate planning, philanthropy, and investments of passion, see the full Knight Frank report here.