Investing in classic cars (Collectibles)

As investors turned to new asset classes in the last couple of years, a remarkable number of new collectible funds has entered the market. More recently, two new funds investing in classic cars have been announced following investor demand, since scarce, rare automobiles have an underlying intrinsic value which should help to reduce downside risk and provide strong, stable performance despite volatility on capital markets.

Globally, rare and collectible car values have remained relatively immune to market volatility. Based on recent trends, investment in this asset class has provided a measure of protection against such volatility.

Investment Strategy:

According to the prospectus, the fund will, under normal circumstances, invest an average of about 70% of the Fund’s assets in classic cars, the weighting may be changed in the reasonable opinion of the investment manager.

Some of the Classic Cars held in the portfolio may be lent to museums, film studios, private exhibitions, etc. The income generated by this kind of lending activity will be directly allocated to the fund´s profit. A particular focus will be laid on equities of the automotive industry and closely related industries including commodities as automobilia. In addition, the manager may invest on an ancillary basis in various assets including derivatives and futures, which maybe designed for hedging purposes.

The fund may also have residual cash balances invested in deposits, money market instruments and shares or units of money market funds.

Selection Process:

The manager permanently screens realized sales prices for classic cars which periodically get reported by independent providers in order to assess overall market conditions for classic cars and recognize the formation of certain market trends.

Prior to acquiring a particular car, the manager conducts a thorough due diligence of that car, analyzing inter alia factors such as its ownership history, optional equipment, engine details, replacements of original equipment, etc.

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About Opalesque A SQUARE
Alternative Alternatives is the first web publication, globally, that is dedicated exclusively to “alternative” investments. A SQUARE's weekly selection feature unique investment opportunities that bear virtually no correlation to the main stream hedge fund strategies and/or distinguish themselves by virtue of their “alternative” motive - social, behavioural, natural resources, sustainable /environment related investing With its “research that reveals” approach, fast facts and investment oriented analysis, A SQUARE offers diversification and complementary ideas for: private, high net-worth and institutional investors, pension funds and endowments, portfolio and hedge funds managers

One Response to Investing in classic cars (Collectibles)

  1. James says:

    I must say: “Very interesting. I like Classic Cars, and thats very special.”

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