Rich people across the world hold about 10% of their wealth in treasure assets, such as art, antiques and classic cars – with jewellery proving most popular.
That’s the main finding of a study by Barclays Wealth, released 11 June, which said that amid market turmoil, investors are looking for tangible and familiar assets.
While some “approach treasure investing strategically, or … think they do”, said Dr Greg Davies, head of behavioural finance at Barclays, most wealthy investors are aware that treasure assets are predominantly non-financial objects – with their value dependent on social attitudes and emotions.
For example, almost seven in 10 respondents agreed the financial value of art was “driven largely by public taste rather than intrinsic worth”. Over two-thirds said emotions influenced their decision-making when it came to investing in passion assets.
“Those who buy treasure assets for emotional objectives are likely to have them fulfilled, and may get a financial return as a bonus; those who buy purely for financial reasons are quite likely to be disappointed … and not reap the rewards of enjoyment,” Davies told CampdenFB.
Regionally, there are big differences in how popular passion investments are. In the United Arab Emirates, 18% of wealth is held in such assets, with fine art tapestry, jewellery and gold proving must popular. In contrast, this figure is just 6% in Switzerland – with the rich investing in jewellery, art and furniture.
In each of the markets examined, jewellery was listed as one of the top three passion investments, with 70% of respondents currently owning some precious jewels. This was followed by fine art pictures and paintings (49%), antique furniture (37%) and precious metals (28%).
About one in five respondents currently own a classic automobile, but this figure is expected to rise to one in four in the next few years. The percentage of people investing in fine art sculptures is also set to increase, from 24% to 26%.
Davies said: “It seems clear that the demand is led by those with large incomes whose wealth is increasing strongly – this implies those assets that are favoured by young, rather than old; by entrepreneurs, rather than inherited wealth; and by emerging, rather than developed markets.
“This combination seems set to boost the ‘status’ assets of classic cars and fine art sculptures, though will no doubt also influence taste within each treasure type.”
The report, Profit or Pleasure? Exploring the Motivations Behind Treasure Trends, was based on a global survey of more than 2,000 high net worth individuals.