HNWIs hold 41% of treasure assets for financial motivations in ME

Only 19 percent of treasure assets - which include items such as precious jewelry, fine art, antique furniture, classic automobiles and precious metals - are held for financial motivations, according to the latest report in the Wealth Insights series from Barclays. However, Middle East respondents report that 41 percent of their treasure assets held for financial motivations, ranking them highly compared with the US, Europe and Asia at 9 percent, 11 percent and 34 percent respectively.
Despite the increased public interest in collectibles and record prices being set at auction, the report finds that investors are far more likely to buy treasure assets for emotional, rather than financial reasons. A third of the 2,000 wealthy respondents surveyed globally confirmed that they were holding more treasure types today than five years ago.
Launched on Monday, the report, Profit or Pleasure? Exploring the Motivations Behind Treasure Trends, provides an in-depth study of investment trends across the world in these “treasure assets” as well as offering insight into the financial and emotional motivations for wealthy individuals holding these particular assets. The report looks at the value these high net worth collectors place on their possessions, as well as considering questions of social utility around accumulating treasure.
Globally, high net worth individuals hold on average around 10 percent of their total net worth in treasure assets, however, this rises to nearly a fifth in the UAE and Saudi Arabia who have 17 percent and 18 percent respectively of their net worth tied up in treasure assets. For individuals in Brazil, China and Singapore treasure assets make up, on average, a sixth of their total wealth, whilst those in the UK (7 percent), India (3 percent) and Qatar (2 percent) hold more conservative levels.
Rory Gilbert, managing director and head of Wealth and Investment Management, Barclays, Middle East and North Africa, said: "This report highlights that there will always be both an emotional and a financial motivation in making a decision to buy a treasure asset and one motivation always takes precedence. Given the difficulties associated with maintaining, securing and liquidating treasure assets, our study suggests that emotional motivations will always pay the greater return. Treasure may, if you're lucky or very knowledgeable, give you a financial return, but buy something you like and it will always give you the emotional return of enjoyment."
Globally, a number of different factors appear to affect the popularity of treasure asset types, from the age of the investor to the wider economic stability of their region. In the Middle East, precious jewelry is by far the most popular treasure asset type for wealthy individuals, owned by 79 percent of UAE respondents, 85 percent of respondents in Saudi Arabia and 86 percent of survey respondents in Qatar.
Greg B. Davies, head of Behavioral Finance at Barclays, comments: "Whilst the type of treasure assets people choose to invest in varies slightly from country to country, the growth in the popularity of treasure is consistent with a general move toward simplicity, familiarity and tangibility in investing. Investing in assets as a like-for-like alternative to traditional asset classes should, however, be done with extreme caution as there are many attendant risks which range from the costs of insurance and upkeep of treasure to the subjective nature of these markets."