Record auction sales boost jewellery investment performance

Record auction sales and strong demand for coloured diamonds and pearls have helped boost the investment performance of jewellery, according to estate agent Knight Frank.

Launched at an event held at the Mayfair headquarters of auction house Bonhams, the latest edition of the firm’s Luxury Investment Index (KFLII) focused on the performance of jewellery – which rose by 5% in value in the 12 months ending October 2015.

Overall, the index found that jewellery has risen 159% in value over the past 10 years, while value of coloured diamond was up 142% over the last 10 years. Meanwhile, strong demand for pearls has seen their value surge by 369%.

Watches also performed well rising 5% in value over the last 12 months and 67% over the past 10 years.

Andrew Shirley, who compiles the index , said a slew of “stellar” auction results throughout the year has kept luxury investments firmly in the media spotlight.

He said: “It is no surprise that KFLII outperformed the FTSE 100, gold and the prime central London housing market, as these kinds of luxury investments are becoming increasingly popular with ultra-high net-worth individuals.

“Jewellery in particular could be considered the ultimate asset class. Since the dawn of time humans have been drawn magpie-like to shiny stones, first from the beds of streams and then mined from ever deeper underground.

“Dispersed around the world by the earliest traders, gems and jewellery have always been an international commodity and store of wealth.”

Matthew Girling, chief executive of Bonhams, added: “Our own experience at Bonhams certainly bears out the report’s conclusions with jewellery and motor cars high among our top performing departments during the past year.”