English coins among top performers

Author:
NMN
Publish date:
Aug 4, 2016

By Richard Giedroyc

The Luxury Investment Index in Knight Frank’s recently released Wealth Report indicates English coins have performed very nicely.

According to the report, rare coins were the second highest performing luxury asset during the 12-month period leading up to the fourth quarter of 2015. High end collectible automobiles was the only luxury asset to out-perform coins. Coins appreciated 13 percent during this 12-month period. During the past five years leading up to 2015 the coins in the index increased in value by 92 percent. It should be remembered that the depths of the Great Recession was from 2008 to 2010, when the value of these coins is first calculated.

The statistics used by the Wealth Report are provided by Stanley Gibbons Investments. SGI Managing Director Keither Heddle was careful to point out that “the bull coin market stems from the global financial crash in 2008.”

According to Heddle, “People were looking for an alternative way of diversifying their portfolio with alternative assets that are tangible and aren’t correlated to the stock market, where everything can drop at the same time. Coins keep going up because they are not linked to the financial market.”

Heddle is partially correct regarding most truly rare coins; however, the value of most collectible and bullion coins declined significantly during the Great Recession. Many rare coins also lost value during this period, while others were simply put aside to be sold once more favorable market conditions appeared. Most less-than-rare coins are influenced continuously by both the stock and the precious metals commodity markets.

The Gibbons company provided the Wealth Report figures from its 2015 English Coin 200 Index, which captured the growth of 200 specific British coins currently valued at between £5,000 and £225,000 each.

According to the Gibbons’ English Coin 200 index, English rare coins have appreciated by 232 percent over the past 10 years, outperforming gold, the FTSE 100 stocks and domestic real estate values.

“The English Coin 200 Index tracks the performance of the top 200 English coins since 2002; it is a snapshot of the market for the sort of rare British coins that are likely to be included in an investment portfolio,” explained Heddle. “It is not a trading index, though, when available, you can acquire the coins in the index. It demonstrates a year on year growth of 12.6 percent for the last 12 months, a 10 year growth [2005 to 2015] of 232.1 percent, and a compound annual growth rate of 12.75 percent over the last 10 years.”

Heddle continued, “The best performer in the last 12 months was a William III silver crown from 1697, which increased in value from £20,000 to £45,000. Pricing is based on valuations given in the wholly independent Spink catalog of English coins [which bases its pricing on auction prices realized for coins of a specific grade].”

The English coin index is a big thing. The index is listed on the Bloomberg Professional TM Service or STGIRCIX.

For many years the New York City rare coin company Stack’s tracked a breadbasket of the value of specific rare U.S. coins. This index is no longer used; however, no one has stepped forward offering a similar index as is being used to measure “luxury” collectibles in Great Britain. One of the problems with the now-defunct index offered through Stack’s was the public perception that this reflected values in the entire U.S. collectible coin market rather than particularly rare coins or luxury collectibles that could normally be anticipated to out-perform the collectible coin market as a whole.

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