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‘Collectibles and luxury items are core for HNW’

High net-worth individuals turned to “investments of passion” as an alternative to traditional assets during 2011, Capgemini has claimed.

By Marc Shoffman | Published Jun 27, 2012 | comments

The World Wealth Report 2012 showed that high net-worth individuals, particularly those in emerging markets, viewed items such as professional sports, art, luxury collectibles, cars, coins, diamonds and gems as core parts of their investment holdings.

However the report said returns on such investments were hard to gauge. It said: “As a result, it is difficult to say how much investable high net-worth wealth will find its way into an investment of passion, but buying interest is expected to remain strong in many classes as investors look to diversify their holdings, especially while strong returns on financial products are difficult to secure.”

The report showed the items were seen as solid investments likely to appreciate in value over time or offer a low correlation to mainstream financial instruments.

Assessing more mainstream markets, the research suggested uncertainty would remain through 2012, driven by the eurozone crisis.

It said: “Investors want to see the eurozone plot a viable route to deficit reduction, but also want assurance that austerity measures will not stifle growth, especially since demand from Europe remains critical to the expansion of export-driven emerging economies such as Brazil and China.

“Even if the eurozone situation stabilises, the ability of individual economies to rebound and grow will depend heavily on the extent to which governments manage the confluence of challenges they face.

“Challenges include the inflation threat in some faster-growing emerging markets and the crippling deficits in many of the world’s developed economies.”

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