Super-rich find solace in treasure
Ongoing economic uncertainty has pushed the super-rich to invest more in treasure assets, the most tangible of safe havens.
Collectables such as fine art, jewellery and antiques are an important component of wealth and globally have risen to almost 10% of the total in recent years.
A Barclays report, “Wealth insights: Exploring the motivations behind treasure trends”, found that a third of global respondents reported that they had increased the number of treasure types they held over the past five years.
Overall, respondents from the United Arab Emirates topped the list, holding 18% of their wealth in treasure, followed by those from Saudi Arabia and China at 17%. South Africans held 11% of their wealth in treasure. The data showed women generally own slightly more treasure, about 11% of their net worth, compared with 9% for men.
Greg Davies, head of behavioural finance at the wealth and investment management division of Barclays, said the growing focus on treasure is an example of a “familiarity bias” that has become more pronounced since the financial crisis: individuals focus on investments that they feel they understand.
But the report noted evidence that treasure assets are correlated with broader financial markets. “When the financial crisis first struck in 2008 the prices of many collectibles dropped significantly. Then, as financial markets recovered in 2010, the art market also rebounded,” it said.
The research found that respondents from economies that have more volatile or less developed financial markets and high per capita incomes generally tend to hold higher proportions of treasure in their portfolio.
In emerging and developed economies precious jewellery is the most popular choice. In South Africa, 70% of respondents own precious jewellery, but India tops the list at 98%. This category is followed at some distance by fine art and antiques.
The research also found the motivations for holding treasure assets are not purely financial. Globally, only 19% of treasure assets are owned by wealthy individuals for financial reasons.