Let's get physical

During the pandemic investors are paying big money for tangible assets such as watches and wine

- TOM WATSON

While cryptocurrencies and non-fungible tokens are hot topics in the investment world, interest in more non-digital objects is still very much alive and well.

With record auction prices and extensive waitlists across the world, demand for collectibles like artwork, rare coins, stamps, fine wine, whisky, watches and even classic cars appears to have heightened over the pandemic period.

"Our business has been completely transformed since Covid," says Lee Hames, chief operations officer at Lloyds Auctions, an auction house and valuers.

"Not only are we seeing more items come to sale, we're also seeing a huge demand among people trying to secure these assets. Take classic car auctions, which have gone from 100 lots per month to 400 lots per month, and that's just continuing to grow."

As in all asset classes, there's great variation in the performance of different collectibles over time, but the general trend has been up. Knight Frank's latest global Luxury Investment Index, which tracks 10 luxury collectibles, recorded an overall 9% in value throughout 2021 - the highest rate of growth since 2018.

Fine wine and watches (up 16%) and art (13%) were the largest growth categories for the year, though rare whisky remains far and away the best performer over the past decade.

"The Covid-19 pandemic certainly hasn't dented the enthusiasm of collectors, who have continued to pay significant amounts of money for an increasingly eclectic mix of assets, including basketball sneakers, comics and even meteorites," says Andrew Shirley, editor of Knight Frank's The Wealth Report.