How to invest in luxury goods: To Splint or not to Splint?
- Jeff Haindl
- Sep 3, 2024
- 6 min read
How everyone can easily invest in luxury goods with Splint Invest
Founded in Switzerland in 2021, Splint Invest is an innovative platform that allows private investors to invest in alternative investments in art, antiques, jewelry, wine, whisky, coins and stamps, vintage cars, sports memorabilia with just EUR 50.
Splint Invest initially chose euros rather than Swiss francs as the investment currency, as the collectibles are usually bought in euros. However, Investors should soon be able to invest directly in Swiss francs.
But regardless of the currency, are investments in luxury goods and other collectibles even worthwhile?
Return on luxury goods and how you can diversify your portfolio
The markets for luxury goods are generally very heterogeneous and have very few transactions, which are often concluded privately. It is therefore not easy to follow the price development of these asset classes and to make a final assessment.
However, the Knight Frank Luxury Investment Index offers a good first overview of returns on luxury goods:
Knight Frank's Luxury Investment Index (KFLII) Overview as of Q4 2023:
Asset class | Return 2023 | Cumulative return 2013 - 2023 |
Art | 11% | 105% |
Jewels | 8% | 37% |
Watches | 5% | 138% |
Coins | 4% | 56% |
Colored diamonds | 2% | 8% |
Wine | 1% | 146% |
Overall index (KFLII) | -1% | 100% |
Furniture | -2% | 40% |
Handbags | -4% | 67% |
Cars | -6% | 82% |
Whisky | -9% | 280% |
Stocks Global | 22% | 118% |
It is noteworthy that luxury goods have performed slightly negatively on average in 2023, while global equities (in US dollars) have gained 22%. In addition, the different returns of the various asset classes and the good long-term (10-year) returns are striking.
Furthermore, the price developments are also very different. Whisky was very popular during the pandemic. The price and the Rare Whisky Icon 100 Index, which tracks this market, rose while stocks fell sharply during this time 📈📉:
Rare Whisky is only one example but there are a few good sites where you can track to overall performance of more common and more liquid (not only liquid in terms of drinking but with more price points) luxury goods such as wine, watches and bluechip art.
Our goal is always to generate a certain return with as little risk as possible (“Diversification is the only free lunch in investing”). With a good long-term return and a return pattern that does not closely follow the one of global stocks, luxury goods are a very interesting asset class for diversifying your portfolio.
It therefore makes sense to expand your investment universe with luxury goods.
However, it is important that you:
invest across different investments per asset class and across different asset classes .
build your portfolio over several years .
only use a small part of your investment portfolio and
only invest money that you don't need in the long term.
What are the challenges of investing in luxury goods
In addition to the time-consuming search for suitable investments in this investment segment, there are five main challenges for investors:
Liquidity: Luxury goods and other collectibles are generally illiquid, which means they can be difficult to sell quickly. It can take some time to find the right buyer willing to pay the desired price.
Valuation: The value of collectibles is often difficult to determine. Professional appraisers or auction houses are usually required to determine the value of an item.
Market Risk: The collectibles market can be unpredictable. What is in demand today may not be in fashion tomorrow, making this type of investment riskier.
Storage and Insurance: Physical collectibles must be stored properly to maintain their condition and value. This can be costly, especially for items that require special care, such as climate-controlled environments for art or wine. In addition, these items should be insured against theft, damage, or loss.
High entry barrier: Luxury and collectible items are usually very expensive and without a lot of capital and know-how it is not possible to build a diversified portfolio.
How Splint addresses these challenges
Splint Invest has built an innovative platform that allows private investors to invest in alternative assets such as luxury watches, whisky and wine. They take care of the search, verification, purchase, correct and safe storage, insurance and sale of such assets.
With Splint Invest you can purchase digital shares, so-called " Splints ", via an app. These Splints allow you to invest in tangible assets starting from as little as 50 euros .
In the app you will also find all relevant information about the investments, from the description, the investment horizon (from 1 to 12 years) to transparently stated costs. The app is self-explanatory and it is best to check it out yourself. If you would like to benefit from a 🎁 starter bonus of EUR 60, simply use our code STUZZ when registering.
What Splint costs you
What also distinguishes Splint is a very user-friendly app, high transparency and moderate fees for this asset class.
An investment via Splints usually costs between 1.9% to 2.9% per year depending on the type of investment. These fees are not charged annually, but rather when the investment is made (as a cumulative platform fee and variable costs for storage and insurance of 4% to 6%) and when the asset is sold (2% of the sales value).
When investing in luxury goods, it is not uncommon to also charge a so-called performance fee, i.e. a percentage fee on the increase in value. This is not the case with Splint Invest and you can see the fees in the app before you invest your Splints.
Is Splint Invest safe?
Splint Invest is a Swiss startup that was founded in 2021. I got to know Splint through my work as a mentor at the F10/Tenity Incubator Program. A lot has happened since then and a cool idea has become a growth company with a very innovative approach that has solved the problem of high barriers to entry when investing in luxury goods.
As a growth company, Splint Invest will probably need to raise more capital. Thanks to low costs, they are already operationally profitable, but they must continue to invest in their growth.
In any case, with your Splints you do not own a share in the company that operates Splint Invest, but a share in the assets in which you have invested. In the event of bankruptcy (you never know), your Splints are anyway not part of the of the company's assets and would be sold via a trustee instead of Splint Invest. You can find out more about the legal and regulatory framework on the Splint website .
How your splints are taxed (in Switzerland)
Luxury goods, and Splints, are tangible assets and, like gold or Bitcoin, do not pay interest or dividends. In addition, any profit from selling them is tax-free in Switzerland (unless you are classified as a professional trader by the tax authorities, which is rather unlikely....). From a tax perspective, investments are therefore very attractive .
Splint provides you with the annual tax statement free of charge in the app after the end of each year.
Conclusion
Splint Invest makes luxury goods and collectibles accessible to everyone with small investment amounts via a cool and informative app. Splint Invest takes care of the selection, purchase, safe storage and sale of the objects with transparent and very fair fees for this asset class.
If you want to diversify your portfolio by investing in luxury goods and collectibles, consider the following points:
Diversify your investments across different assets within each asset class and across different asset classes.
Take your time and build your portfolio over several years .
Only invest money that you don’t need in the long term.
As a general rule, do not use more than 5% of your investment portfolio for such investments, although this of course depends heavily on your personal situation.
👉 Use our code STUZZ upon registration if you want to benefit from a 🎁 starter bonus of EUR 60.
Please note that you are responsible for your own investments, but we are happy to provide you with information for you to make the best decisions for yourself.
Happy investing!
Jeff Haindl & Reto Rauschenberger
👉 Visit our🎁 STUZZ4FREE voucher 🎁 page. By redeeming vouchers you benefit and support our work at the same time. 🤗
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