Rare coin index beats the FTSE 100
An index that tracks the value of 200 rare British coins produced a return of 6.2pc in 2015, beating the FTSE 100, which lost 4.9pc.
Stanley Gibbons, a specialist in alternative assets, put the outperformance down to collectable items offering “a powerful hedge to global financial instability”.
Keith Heddle, managing director of Stanley Gibbons Investments, said: “Coins are a classic heritage investment, with more than two and a half millennia of history, tangibility, desirability and strong investment growth.
“With interest rates still at record lows, these alternative assets can provide not only an excellent return on investment, but are also much more enjoyable to own than a share certificate or a unit in some fund.”
Popular collectible items, such as coins and stamps, have soared in value and delivered bumper returns over the past decade. The Stanley Gibbons Coin Index is up 195pc.
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The index is merely a snapshot of the market, and is not an index tracker fund.
Coins are one of the most popular passion investments. Mr Heddle added this is due to “their tangibility and literal link to money, wealth and precious metals”.
Last year the standout performer was the 1738 George II Gold Five Guineas, which increased by 50pc to £45,000.
The most valuable coin in the index, the 1703 Anne Pre-Union Type Gold Five Guineas, increased in value by £50,000 to £375,000.
Despite the high returns, most financial planners caution against investing in obscure assets, or strictly limiting your exposure. Instead advisers stress the need to split savings across a wide range of mainstream assets, in order to ride out stock market volatility.
Another pitfall is a shortage of liquidity. Given that there are fewer buyers of alternative assets you may not sell at the price you hoped for. This makes it extremely difficult for investors to sell at the top of the market.
It is also worth noting that alternative investments do not produce any earnings or income. This means changes in price are solely down to supply and demand. Therefore if there was a rush to the exits, the value of your investment could plummet.