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.