The new safe haven of millionaires

Unnerved by stock market wobbles, the world’s wealthiest people have been looking for alternative places to put their cash. Yet their choice of a safe haven has been changing.

Every year Knight Frank, an estate agency, compiles an index comparing the performance of various luxury investments. This year a newcomer entered the top spot, with a price increase of 13pc over 2019: designer handbags.

The average increase in value of these bags was more than double that of rare whiskies or art. It was six times higher than the price appreciation of investment grade watches over the 12 months.

The worst performing luxury investments were cars and jewellery, where prices dropped by 7pc.

Art Market Research, the firm which supplies much of the data for the index, used the prices of Hermès handbags to assess the market, as these are considered the most collectable. One of the most desirable designs over the past few decades has been the Hermès Birkin bag.

In the 35 years since it was first produced the value of these bags has risen faster than both the S&P 500, a measure of the American stock market, and the price of gold.

Andrew Shirley, who created Knight Frank’s index, said that as the economic outlook becomes less certain investors are being more careful about where they put their money.

“Luxury items have often performed well when stock markets are down. Classic cars, for example, did very well after the 2008 financial crisis,” he said.

Previous top performers, such as wine and whisky, suffered this year due to trade spats between America and China, he added.

Other research by Knight Frank showed that four in five ultra-highnet-worth individuals are planning to change their investments in response to the global economic slowdown, with almost half intending to reduce their exposure to stocks and shares.