Hidden Gems
Rubies are red, sapphires are blue—and investing in them can add a colourful yield to your portfolio
Why investing in precious stones such as sapphires and rubies can add colour and diversity to your portfolio
White diamonds will always retain their sparkle and allure—but adding some colour never hurts, and Hong Kong buyers are part of a global renaissance of coloured gemstones such as emeralds, rubies and sapphires.
These precious stones offer opportunities for collectors to develop expertise and build diverse, interesting collections—as well as adding a splash of colour.
Their growing popularity has also made them an interesting asset for investors looking to diversify some of their portfolio into passion investments and away from stocks, bonds and property. During the past decade, coloured gemstones have appreciated by 113 per cent, according to Knight Frank. While Knight Frank focuses on property, its annual wealth report on property and investment also provides insights into luxury spending.
“Younger consumers are looking to celebrate milestone occasions—or just treat themselves—with more individual jewellery,” says Andrew Shirley, head of luxury research at Knight Frank. “Coloured gemstones, with their individual characters and exotic origins, fit the bill perfectly.”
This has led to some extraordinary recent sales this year, with coloured gemstones outperforming the wider jewellery market, according to Shirley.
Luxury jeweller Harry Winston paid US$7.2 million for a 22.86-carat, cushion-shaped Burmese ruby sold through Christie’s in May. In the same month, an art deco Colombian emerald and diamond necklace made in the 1930s for the US socialite Hélène Beaumont sold for US$3.6 million through Sotheby’s, while a 17.43-carat Kashmir sapphire ring formerly owned by a European noble family sold in April for £723,000, more than twice its guide price, through Bonhams.
Each of them represents the most desirable examples of coloured gemstones—emeralds from Colombia, rubies from Myanmar (or Burma as it generally still referred to in the jewellery business) and sapphires from Kashmir.
“These precious stones offer opportunities for collectors to develop expertise and build diverse, interesting collections”
“The increasing international demand due to the rarity and limited supply have made these top-ofthe-grade coloured stones most desirable,” says Jean Ghika, global director of jewellery at Bonhams. “There is a particular market interest in the more natural pieces.”
By “natural,” Ghika means untreated and unheated. Emeralds, for example, are commonly treated with oils to fix flaws and improve colour, while sapphires and rubies are commonly heated to achieve a permanent improvement in colour and sometimes clarity.
Indeed, the prevalence of these treatments has helped to keep the lid on prices of coloured gemstones in the past, with many sellers failing to disclose such practices, but buyers have grown in confidence recently due to widespread certification, greater industry transparency and more sophisticated gemmological analysis. As this confidence grows, so too will prices.
And then there are coloured diamonds, which are much rarer than white diamonds, with many of the biggest sales taking place in Hong Kong. In 2015 local property tycoon Joseph Lau bought his sevenyear-old daughter a 12.03-carat blue diamond for US$48 million, which he re-named the Blue Moon of Josephine. At almost US$4 million per carat, it remains the highest price ever paid for any gem.
Hong Kong also previously held the record for the most expensive pink diamond, The Pink Promise, an oval-shaped diamond of just under 15 carats, which sold in 2017 for US$2.18 million per carat. That record was beaten in November 2018 when Harry Winston paid US$2.6 million per carat for The Pink
Legacy, a cut-cornered, rectangular-cut diamond weighing 18.96 carats.
Besides rubies, sapphires, emeralds and diamonds, Ghika says collectors are showing noticeable interest in spinels, with many wanting to buy the best examples. Stones over 10 carats are considered incredibly rare, so it was no surprise when an exceptional 19th century octagonal, step-cut, 50.13-carat spinel and diamond brooch/pendant set a world record price of £962,500 in April 2015, at Bonhams.
“We have also seen increased popularity in a number of other coloured gemstones that might previously have been considered more niche: Paraiba tourmalines, colour-change Alexandrites, padparadscha sapphires and cats-eye chrysoberyl, for instance,” says Ghika.
With such a variety of coloured gems available, collectors can enter the market at almost any price point. And with returns of more than 100 per cent during the past decade, they can help brighten up your investment portfolio, too.
“The increasing international demand due to the rarity and limited supply have made these top-of-the-grade coloured stones more desirable”