Art tops 2022 luxury investment index
The results of the Knight Frank Luxury Investment Index show that investments of passion are still riding high, despite economic worries.
3 minutes to read
The Knight Frank Luxury Investment Index (KFLII), which tracks the value of 10 investments of passion, rose by a healthy 16% during 2022, comfortably beating inflation and outperforming the majority of mainstream investment classes, including equities and even gold.
Here we take a look at some of the best performing investments of passion over the last 10 years.
(Click image below to download and explore in detail)
Art
Within the index, which is weighted to reflect the “collectability” of each of its constituents, half of the assets saw double-digit growth last year. Art was the top performer, rising by 29%.
Sebastian Duthy of Art Market Research, which provides the data for a number of our asset classes, says much of that performance was driven by the stellar prices paid for museum-quality works of art by ultra-wealthy collectors.
“Several single owner collections, including works owned by Microsoft founder Paul Allen and American investor Anne Bass produced totals in excess of US$2.5 billion, more than doubling collection sales in 2021. With the provenance of a high-profile collector attached, blue-chip works routinely break auction records and last year was no exception with five achieving over US$100 million.”
Cars
Classic cars also revved up their performance last year rising 25%, the strongest finish for nine years. A US$143 million Mercedes-Benz Uhlenhaut Coupé comfortably set a new record for the most expensive car ever sold. Dietrich Hatlapa of HAGI, which tracks the very top end of the market for us, says high-end collectors are back in the market after the Covid-19 pandemic saw the postponement of many sales.
However, he warns against relying on cars as a hedge against inflation. “Broadly, the classic car market has neither a positive nor an inverse correlation with other sectors. In other words, the classic car sector generally marches to the beat of its own drum. That’s a feature which many collectors find attractive.”
Watches
Watches took third place on the KFLII podium in 2022, up 18%. “The watch market at the top three auction houses grew 33% in 2022 to a total of £475 million. This included 40 watches that sold for over £1 million, 12 more than the previous year,” points out Duthy. However, the market is being led by a small number of models, he adds.
“Look at any auction catalogue and you will see sales have been dominated by just three designs over the past five years – the Patek Philippe Nautilus, Audemars Piguet’s Royal Oak and the Rolex Daytona. While these watches have provided a huge boost to sales on the secondary market, it’s a growing problem for the brands who say they cannot cope with demand.”
Wine
Our wine index recorded growth of 10% – respectable, but down on 2021’s sparkling 16% rise. Nick Martin of our data provider Wine Owners says this is due to some of our index’s top performers finally hitting a peak. “Burgundy has risen by more than 80% during the past five years, but at some point the market had to pause for breath.”
Whisky
Whisky, although still KFLII’s 10-year leader by a good margin (+373%), was one of 2022’s weakest performers with growth of just 3%. Our data guru Andy Simpson says the market for bottles valued at over £5,000 has definitely weakened. “As prices rose speculators came into the market just looking to flip bottles, which was ultimately unsustainable.”
Discover more
Download
Download the full report for more in depth analysis and the latest trends relating to global wealth.
Download the report
Subscribe
Subscribe for all the latest insights and additional content.
Subscribe