Art, still a primary investment choice for the wealthy
According to a recently published report by WealthInsight an increasing number of millionaires have been showning interest in alternative investments, such as art, classic cars, wine, jewelry, gems and watches. It is expected that luxury investment will only continue to flourish and create interest, with it expected to grow at a Compound Annual Growth Rate (CAGR) of 10.34 per cent to reach US$621 billion by 2017.
Millionaires of developed countries, such as the US, UK, Germany, France, Switzerland, Australia, Canada, Japan and Poland contributed the largest share in luxury investments, but millionaires of emerging countries, such as Brazil, Russia, India and China, registered the strongest growth at a CAGR of 22.24 per cent since 2007, with luxury investments growing from US$43 billion in 2008 to US$96 billion in 2012.
To diversify their wealth, millionaires are continuing to look at art as an investment. Art funds have had limited success in developed markets compared to China, which continues to drive demand.
With diamond prices and transparency increasing, the rise of individual investors buying diamonds has been on the rise too. largely thanks to the introduction of diamond exchanges around the world – International Diamond Exchange (IDEX), Israel Diamond Exchange (IDE) and the recently opened SDX (Singapore Diamond Exchange). The SDX was launched in 2012 and Singapore has now become the diamond trading hub of Asia.
Fine wines have been attracting more investors, many millionaires are adapting their tastes to new burgundies and less significant Italian wines, in addition to other lesser known vintages. Investments in vintage cars continue to grow, with a rapid development, especially in emerging markets such as China, India and Brazil.