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Diversifying into tangible, heritage assets

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By Keith Heddle – In our industry, it is commonplace for wealth managers, collectors and other high-net-worth individuals to approach us seeking long-term, tangible investment opportunities. We make it our business to demonstrate to these clients that they are investing in low-risk collectibles with potentially high returns, if they are prepared to take a longer term view.

Stanley Gibbons specialises in handling only the finest and most exceptional stamps, coins, medals or signatures, establishing a prestigious portfolio of lucrative, safe-haven collectibles. Our team of experts has perfected the art of ‘stock picking’ in a specialised and often overlooked field, securing consistently solid returns for our investment clients.

The market for these items is much less subject to risk than one might immediately think. Their value does not correspond with market volatility and is therefore a ‘safe’ investment in a world of financial instability. This has subsequently been affirmed by using a number of indices to track historic prices.

Perhaps our most well-known tool is the GB30 Rarities Index, which has tracked the performance of British, investment-grade stamps for 50 years. Amazingly, the value of the stamps in this index has not dropped in this time. To further validate the market, we undertook a deeper and broader study of 250 rare British stamps. We then tracked their performance over the previous 12 years, which showed a compound annual growth rate of 13.2%; like the GB30 Rarities, this GB250 Index is also listed on Bloomberg for transparency and robustness.

Due to the nature of its asset class and the basic laws of supply-demand economics, the value of stamps is, in many ways, much safer than other commodities since it is underpinned by the demands of collectors rather than fluctuating markets. This was shown in the crash of 2008 where the GB30 Rarities Index increased by 38.6% and the value of the best-performing stamp by an astounding 93.5%. Even the worst-performing stamp increased by 8.6%!

Our experts understand what defines sought-after items and how to ensure they are safely preserved to at least maintain, if not gain, in value.

For the future, our vision is to create a global trading platform, where rare and valuable collectibles can be traded while creating greater transparency and liquidity.

We recently acquired a US-based Internet auction business, which actually synchronises with eBay. The first online exchange of its kind, it will solely deal with collectable stamps, postcards, comic books and coins, broadening our outreach to clients looking to trade and also for healthy investment returns.

Another key market for rare stamp investors is China – in recent years, the Chinese market has seen remarkable growth, as high-net-worth Chinese collectors reclaim their heritage. Our China Market Study showed that between 1989 and 2012, the value of 200 rare investment-grade Chinese stamps increased by £4m – a compound annual growth rate of 11.6%!

Stanley Gibbons is set to build its business in Asian markets, with new offices in Singapore and Hong Kong. Although collectibles are not right for everyone, we have seen a steady trend of clients coming to us directly to diversify their portfolios into tangible, heritage assets.

With 157 years of unrivalled expertise and as the holder of the Royal Warrant for services to philately, Stanley Gibbons is the undisputed global market leader and the most trusted brand in its field – good to know when you’re entrusting them with your capital.

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