Passion investments gain up to 6.7% in June 2023

Mario, Head of Investments at Splint Invest, explains the performance of the assets in the last month.

How did Splint assets perform in June? 

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In June 2023, Splint assets performed well overall, driven by a higher demand in the luxury goods market. Categories such as diamonds, cars, art, handbags, and LEGO showed significant growth. The overall year-to-date performance increased to 2.39%.

Outstandingly well was the performance of the painting from Albert Willem named "A difficult moment during the driving test" with +6.7% as the LEGO Star Wars 75192 set with +4.5%.

How should we place this context of current macroeconomic trends? How have other asset classes performed?

Last Friday, U.S. stocks closed with positive gains, not only for the day but also for the week, quarter, and the first half of the year. Similarly, the pan-European Stoxx 600 index recorded a 1.16% increase, resulting in a strong 8.8% gain for the first half of the year. This growth was supported by a lower-than-expected inflation reading for the euro zone. According to preliminary data, headline prices in June rose by 5.5% year on year, which is a decrease from the 6.1% increase seen in May.

During the first half of the year, the stock market experienced an impressive rebound, primarily fueled by the outstanding performance of seven prominent Big Tech stocks. UBS reports that these companies collectively contributed to 80% of gains observed in the S&P 500 index. Despite this concentrated growth, analysts hold an optimistic view that the rally might expand in the third quarter. This optimism is driven by the belief that a potential recession may be postponed, further supporting the market's potential for broader gains.

Recent months have seen a decline in the U.S. housing market, a decrease in manufacturing activity, and an inverted U.S. Treasury yield curve, historically indicating an impending recession. However, there is still a plausible argument for a soft landing, primarily supported by the resilience of the U.S. labor market. Positive indicators include job additions exceeding expectations, a year-over-year increase in wages, and historically low unemployment rates.

In May, the U.S. personal consumption expenditures price index experienced a mere 0.1% rise compared to the same period last year, marking the lowest increase since April 2021. When excluding food and energy prices, the figures showed a slightly higher growth, with a 0.3% increase month over month and a 4.6% rise from the previous year. However, this annual figure fell short of economists' expectations by 10 basis points.

In June 2023, the gold price declined by -4.2%.

How did the value of beloved Hermès Birkin and Kelly bags develop in June?

Splint Invest's assets, specifically the Hermès Birkin and Kelly bags, have exhibited a consistent increase in value, following long-term price trends. Handbags as a category saw a 0.8% rise in value, with the Hermès Birkin Shadow bag being the top performer, experiencing a notable 1.9% increase in value. This suggests that these luxury handbags have proven to be a lucrative investment option within Splint Invest's portfolio.

What about the performance of the category cars?

The car market is currently facing challenges due to the recessionary conditions. Prices of mass-produced standard luxury cars, like the Porsche 911 - 964 and the Ferrari 308, have remained stagnant over the past six months. As a response to this situation, the focus has shifted towards selecting cars with potential for development as investments.

To cater to this demand, a decision was made to introduce a highly limited young timer, the Renault Clio V6, as the first offering. The Renault Clio V6 was highly admired by many young individuals when it was originally released in the early 2000s. Now that those individuals have grown in both age and wealth, there is an expected rise in demand for such special and rare cars.

In June, the value of the Renault Clio V6 increased by 1.9%, indicating its potential as a valuable investment option in the current market conditions. The emphasis on limited production and its nostalgic appeal to the generation that admired it in their youth are contributing factors to its growth in value.

What about the performance of diamonds?

In June, all of Splint Invest's diamonds saw an increase in value, ranging from 0.6% to 2.6%. Diamonds are considered a safe haven asset during times of crisis due to their significant storage advantages when compared to gold. Investors often turn to diamonds as a secure investment during uncertain economic conditions, making them a valuable option in turbulent times.

Did art continue to grow in May?

The performance of the category art remains at a high level. In June, our new painting "A difficult moment during the driving test" by Albert Willem increased in value by 6.7%. The other painting by Albert Willem increased as well by +2.8% and shows a year-to-date performance of 18.1%. Our latest release, a print from Andy Warhol's Flowers series, saw a value increase of 0.2% and shows an increase in value since the release in March of 4.2%.

How did you latest asset category LEGO perform?

The timing to invest in LEGO sets was clearly right. During summer prices are generally lower compared to winter, which allows us to source at better prices. Both of our LEGO sets increase by more than 2.0% which is a great start for our newest asset category.

What about watches?

The watch category shows a mixed picture for June. We can observe significant performance differences between the different assets. The Rolex Sky-Dweller Ref. 326934-0004 saw a gain of 3.8%, while the Patek Philippe Aquanaut experienced a loss of -4.7%.

Watches remain an exciting asset class as they have the potential for attractive returns and price trends. After a difficult year, the demand for luxury watches began to pick up again in early spring this year. Therefore, we still see promising signs for a turnaround.

What have been the developments in whisky bottles?

The value of whisky bottles has continued to increase in June. However, the indexes used in our pricing model decreased by close to 1% which affected as well the prices of our bottles. On average we saw a gain of 0.09% in June. The best performer was the Macallan 1940 Gordon & Macphail with a 4.2% increase.

And whisky casks?

The value of whisky casks has shown a stable performance, with a slight overall increase of 0.7%. Staoisha and Tobermory casks performed particularly well, gaining 0.8% in value.

The whisky casks category is known for its stability, as it is not significantly impacted by short-term market fluctuations. Therefore, stable performance can be observed in this category. Braeburn Whisky, our whisky cask expert, predicts an average projected growth of 14.95% in 2022, which represents a 1.69% increase from 2021.

And how did the wine investments perform?

The Wine category has experienced a slight drop of -0.2%. Year-to-date we are at +0.1% performance. The individual bottles performed quite different. We saw a performance range from +3.1% to -3.9% this month.

The en primeur release prices for Bordeaux wines increased by close to 20%, this led to an overall increase of fine wine coming from that region. The En Primeur 2021 Figeac increased by 0.9%. 

On the other hand, the Italien wine from Biondi Danti lost close to 4% in June.

Overall, we are expecting the performance to pick up due to the scarcity of Burgundy wine and Champagne.

How about rum?

As the Whisky index is used as well in the pricing model of the Rum, we saw a slight decrease in the prices for June. The overall decrease is at 0.3%.

What is your final conclusion? 

The global demand for luxury products continues to increase. We are optimistic about the value development of our assets. There are promising signs which predict a recovery.