Jewellery is the most popular collectible investment in the UK, according to a recent study released by Lloyds Private Banking.
It found that out of the one in six UK investors who held collectibles in their portfolio 9% of them invest in jewellery, compared with an average of 7% who invested in other investment hobby items.
The study also revealed that investors are willing to part with large sums of money to invest in what they love. On average, £18,700 is the most spent on a single jewellery investment, with more than one in five (21%) spending more than £50,000 on an individual item.
Women were found to be the most interested in this particular asset class with almost half (46%) of investors in jewellery being female.
However, investors who don’t have tens of thousands spare to spend on an alternative investment are finding that investing in their hobby doesn’t need to break the bank. Some 25% of investors spend less than £1,000 on hobby investments in general, demonstrating that there needn’t be a high cost barrier to investors diversifying their portfolios.
Investing in pastimes can be a highly profitable investment option, with jewellery investments set to yield a return of 35% over ten years. Respondents reported an average best return on a single item of 39% overall, although one in eight investors have seen a 100% return on an investment.
Overall, the majority of investors (61%) are satisfied with the performance of jewellery in the last year and satisfaction grows the longer the investment is held (67% for those over ten years).
The majority of hobby investments are driven by an investor’s personal interest for the asset class. This is the case for jewellery, where 25% of owners link their investment to personal sentiment.
A further 20% say they choose to invest for purely financial reasons, and 22% to build a personal collection.
Markus Stadlmann, CIO at Lloyds Private Banking, said: “In investment terms, work and play do not need to be mutually exclusive, and with the right investment approach it is possible to make your interests pay.
“Often tangible assets, such as jewellery, retain their value and are not eroded by inflation. Over the long-term, these types of assets do not closely correlate with more traditional equity and bond markets, and therefore offer diversification opportunities. Investing in something you enjoy is a great way to make your portfolio unique to you.”
Meanwhile, the study found that jewellery will attract “significant amounts” of investment in the future; one year, £7,800; five years, £13,200; and 10 years, £14,600.