Nearly two-thirds of single-family offices now hold assets uncorrelated to their core investment programs, almost double the share reported a year earlier, according to a survey by BNY Wealth. The firm polled investment decision-makers at 290 single-family offices, nearly half of which oversee more than $1 billion. The shift toward luxury assets—including watches, fine jewelry, art, spirits, sports teams and music rights—reflects growing concern about inflation and the risk of central-bank policy errors, which respondents ranked as the top threat over the next five years.
The categories that grew most were tangibles that generate no cash flow. Watches, fine jewelry, art and spirits all saw higher allocations year over year, BNY found. Chuck Long, head of international markets and family office at BNY Wealth, said certain luxury assets such as sports and media rights can offer protection against inflation through pricing flexibility and recurring cash flows. But the assets offices are actually buying look more like stores of value than income generators.
Recent performance data is mixed. The Knight Frank Luxury Investment Index, which tracks 10 categories of collectibles, slipped 0.4 percent in 2025 after declines across most asset classes in 2023 and 2024. Fine art sales across major auction houses rose 11 percent last year, led by the $236.4 million sale of Gustav Klimt's Bildnis Elisabeth Lederer at Sotheby's in November. Watch prices climbed 5.1 percent, propped up by Patek Philippe, which rose 12.1 percent, and Rolex, up 4.6 percent. Fine wine fell 2.5 percent in 2025 as U.S. tariffs weighed on demand, leaving prices down nearly 25 percent from their 2022 peak.
Long-term research on luxury assets as inflation hedges is similarly mixed. A 2021 study by Duke University's Campbell Harvey and researchers at Man Group examined eight periods of high inflation in the U.S. from World War II through the run-up to the 2008 financial crisis. During those inflationary regimes, art returned about 7 percent a year above inflation, wine 5 percent and stamps 9 percent. But a 2025 study in Applied Economics found that while art hedged against inflation over the long term in France, it did not in the U.S. or U.K.
In 2022, Credit Suisse, in collaboration with Deloitte Private, found that some luxury goods hold up far better than others. Chanel handbags, traditional Chinese art and watches did well in high-inflation periods, the firms said. Fine wines, modern and contemporary art, and American and Latin American art tend to suffer in high-inflation regimes, they found. Sotheby's reported record first-half sales of $4.4 billion in 2026, up 58 percent from a year earlier. CNBC reported that wealthy consumers are increasingly buying jewelry, especially colored gemstones, as investments.
The allocations that look exotic in benign markets often turn out to be the ones that compound nothing through the rough years, family office advisor Jaf Glazer has cautioned.
The same families putting money into luxury assets are still betting heavily on artificial intelligence. For the third straight year, BNY found that AI ranked as the most compelling investment theme for the next five years, cited by 68 percent of respondents. Marc Andreessen argued last year that venture capital may be one of the few jobs safe from AI, since deciding where to invest relies on intangible skills that make it more art than science. In February, Y Combinator cofounder Paul Graham posted on X that in the AI age, taste will become even more important. When anyone can make anything, the big differentiator is what you choose to make, he said.
In a 2009 paper in the American Economic Review, economist Benjamin Mandel argued that art cannot be valued like equities or other investments, because its value to the owner comes both from the aesthetic pleasure it provides and from the signal of wealth it sends. A 2011 study in the American Economic Review by William Goetzmann, Luc Renneboog and Christophe Spaenjers found a long-run relationship between top incomes and art prices and argued that high-end art prices are driven less by the average person's buying power than by how much the wealthiest can spend. Research from the Federal Reserve Bank of New York found that households earning more than $125,000 saw cumulative real spending growth of about 7.6 percent.