Ultra rich have a new passion: Coloured gemstones

Chennai: In what could be good news for India’s gems and jewellery industry, ultra high net-worth individuals (UNHWIs) globally are getting more passionate about coloured gemstones.

In April, a 17.43-carat Kashmir sapphire ring was the top draw at Bonhams’ London sale. Formerly owned by a European noble family, this Kashmir sapphire ring fetched £723,063, far exceeding its £300,000 to £400,000 guide price.

Among coloured gemstones, ruby, emerald, sapphire and colourless diamonds were in huge demand during recent auctions.

Data from Fancy Color Research Foundation show a carat of ruby was recently auctioned for $11,96,809, emerald for $305,516 and colourless diamonds for $282,485. Coloured gemstones have provided 113 per cent returns for a 10-year period, finds Knight Frank Luxury Investment Index for Q1 2019.

“Promising auction prices of coloured gemstones depict that consumers prefer high-quality gemstones that are rare to collect and unique in designs. More than 100 per cent incremental value of the gemstones and jewellery over a decade have made them lucrative asset investment classes than just purchasing it for aesthetic value. Much of the rising popularity of coloured gemstones is due to growing awareness and developments that have boosted consumer confidence, such as widespread certification, more industry transparency, and gemmological analysis,” Shishir Baijal, Chairman & Managing Director, Knight Frank India.

However, Indian ultra rich have just started realising the potential of coloured gemstones as a mere 7 per cent prefer them as an asset class. They are passionate about making investments in art, followed by watches and cars.

Almost 69 per cent ultra high net-worth individuals in India find art as their investment of passion. This passion is not without any fundamentals. Art as an asset class has made 148 per cent value gain in a 10-year period and has appreciated 12 per cent in 12 months.

A majority of UHNWIs, 52 per cent, likes to invest in watches, which have provided returns of 73 per cent in the longer term of 10 years and 5 per cent in a shorter term of one year.

Around 38 per cent of the ultra rich invest in luxury cars. Though, in the short-term, returns from cars have been rather flat at one per cent, in a 10-year time horizon, it gave a high return of 189 per cent.

Ultra rich are equally passionate about Whisky and jewellery, as 31 per cent has chosen these asset classes. While whisky provided the highest return of 563 per cent in 10 years, jewellery value too doubled at 112 per cent. Even for a yearly term, whisky appreciated 35 per cent.