_‘Collectable Handbags’ takes top spot in the Luxury Investment Index
In the first index dedicated to tracking the burgeoning market for collectable handbags, Art Market Research (AMR), which supplies much of the data for the Knight Frank Luxury Investment Index, delves into the world of this emerging asset class. For KFLII, we focus specifically on collectable handbags made by Hermès and reveal that prices have more than doubled in value over a 10-year period (108% growth).
Source: Compiled by Knight Frank Research using data from Art Market Research (art, coins, furniture, handbags, jewellery, stamps and watches), Fancy Colour Research Foundation (coloured diamonds), HAGI (cars), Rare Whisky 101 and Wine Owners
*All data to Q4 2019 except stamps (Q4 2018)
Sebastian Duthy, Director, Art Market Research said: “It’s only been possible to create an index on handbags now because of the frequency with which many iconic pieces are coming to auction today. Although bags made by other luxury brands like Chanel and Louis Vuitton are also highly collectable, it is those made by Hermès that attract the highest prices and are considered the most desirable.”
The index results show that on an annual basis handbags outperformed both whisky and art, which both recorded growth of 5%. Classic cars, another strong performer in recent years, slipped 7%. Overall, the KFLII, which is a weighted average of each asset class, fell by 1%.
However, when we look at the results over a 10-year period, it is a different picture. Rare whisky continues to top the charts rising 564% followed by cars (194%). KFLII rose by 141%.
Knight Frank’s Joint National Head of Private Office Sarah Harding said the Wealth Report Attitudes Survey 2020 found UHNWIs currently allocate around five per cent of their portfolio to collectables.
“The results of the survey reveal that most UHNWIs are planning to retain or increase their allocations to luxury collectibles, which is no surprise with impressive returns on offer,” she said.
“Ultra-wealthy investors from the Middle East and Europe are leading the charge in growing demand for collectables, while nearly all of the Australasian investors are expected to maintain the same exposure to this asset class.
“As luxury collectables continue their rise up the investment agenda, a growing number of fledgling UHNWI collectors are making their first forays into the world of auction sales, which can be an art in itself.”
"As with other investments of passion like rare whisky, whose value has risen sharply in recent years, handbags are increasingly being seen as an investment class in their own right, as well as highly desirable fashion accessories. Collectors are prepared to spend hundreds of thousands of dollars on the rarest or most desirable bags."
Ultra high-net worth asset allocations (taken from The Wealth Report Attitudes Survey 2020)
| Asset | Proportion of the average UHWI investment portfolio invested into each asset class |
| Property as an investment | 27% |
| Equities | 23% |
| Bonds/Fixed income | 17% |
| Cash/currencies | 11% |
| Private equity | 8% |
| Collectables | 5% |
| Gold/precious metals | 3% |
| Crytocurrencies | 1% |
Investments of Passion (taken from The Wealth Report Attitudes Survey 2020)
How is the allocation to your clients’ wealth to collectables changing or likely to change in the near future?
| Region | Increasing | Staying the Same | Decreasing |
| Africa | 24% | 53% | 22% |
| Asia | 31% | 59% | 10% |
| Australasia | 4% | 93% | 2% |
| Europe (excl. UK) | 47% | 47% | 6% |
| Latin America | 33% | 42% | 25% |
| Indian Sub Continent | 24% | 56% | 20% |
| Middle East | 48% | 39% | 13% |
| North America | 14% | 78% | 8% |
| Russia & CIS | 36% | 50% | 14% |
| UK | 36% | 62% | 2% |