For those investors able to afford them, classic cars and watches, rather than traditional stock markets, are where the most impressive returns can be found.
"Passion assets" collected by wealthy individuals outperformed the global stock market between the start of 2005 and the middle of last year, according to research by Coutts, the British private bank that counts the Queen as one of its clients.
Classic cars were the best performing alternative investment, returning 257 per cent in the seven-and-a-half-year period, while the value of classic watches surged 176 per cent and jewellery jumped 146 per cent.
Coutts, which has created an Objects of Desire index, stripped out the impact of foreign exchange movements by calculating the return of investments in the currencies in which the assets are normally bought and sold.
Standardised in US dollars, the index had gained 82 per cent since the beginning of 2005, compared with a 53 per cent rise in the global MSCI All-Country stock market index, the bank said.
The first edition of the Coutts index was published this week. It tracks 15 asset classes in all, including stamps and coins, rare musical instruments, and "trophy" property.
- Sydney Morning Herald