BUILDING A PORTFOLIO


Our bespoke investment service

The Coin Cabinet’s portfolio service offers clients bespoke advice on building a collection of investment-quality gold coins based on their budget, interests and risk profile. Whether we’re working with a City trader, someone who has inherited a sum they want to invest or an avid numismatist, we provide practical guidance on a number of strategies — from a traditional focus on sought-after older coins to an emphasis on modern proofs and commemorative issues.

The benefits of building an investment portfolio

True market value: coins purchased through our portfolio service are priced at market value, a discount to auction prices realised. We offer a transparent pricing structure, informed by a detailed understanding of current prices, market demand and collecting trends based on data from our biweekly auctions.

Tax-efficient investing: unlike most assets, profits from selling coins are capital gains tax (CGT) free for UK residents, while gold also enjoys a VAT exemption. Additionally, coins are easier to liquidate than other real assets such as property.

A tailored approach: we customise clients’ portfolios to match their investment criteria, ensuring an optimum size, time horizon, spread and sensitivity to risk for each individual.

Here’s an example of how we might build a portfolio, in this case with a focus on under-valued modern gold proofs: this would consist of coins graded 69, thus avoiding the price premium for a graded 70 — a decision based on our auction price data that suggests graded 69 modern gold proof coins are under-valued. As an illustration, an 1989 gold £2 graded Proof 69 was sold for £825 in our 29 December 2019 auction. On 29 March 2020 an example sold for £900, a 9% rise in three months. This is still a significant discount to a graded 70 example which sold for £2,100 on 25 October 2020. Our underlying assessment is that there is very little difference between a graded 69 and 70, yet current prices reflect a marked difference. In our view the graded 69 is therefore significantly under-priced.

Portfolio options

The Coin Cabinet’s portfolio service offers clients the latest information and advice on current and upcoming market trends informed by a detailed understanding of auction pricing and overall customer demand. Additionally, we emphasise the importance of keeping abreast of market news, and regularly post analysis and investment data on The Coin Cabinet’s blog, monthly newsletters, quarterly webinars and social media channels.

Whatever the criteria The Coin Cabinet can build a portfolio, monitor its progress using up to the minute sales data from our biweekly auctions, and ultimately arrange for liquidation — all tailored to meet each individual’s budget, timescale and risk profile.

The following describes an investment strategy created by The Coin Cabinet for a client in 2020: having no prior knowledge of coins or investing, this client approached us with £20,000 to invest, unhappy with the low returns offered by their bank’s savings account. In June 2020 we invested £19,708 in a portfolio on their behalf, comprising 17 modern gold proof coins of various denominations, all graded 70. Based on our October 2020 auction results, the portfolio would be valued at an estimated £28,922 gross. This represents a gross (unrealised) profit of £9,214 in four months.

To discuss investing in gold, or for more information about building a portfolio, contact The Coin Cabinet’s Investment Director, Tom Pelc.

The information provided is for your general information and use and is not intended to address your particular requirements. In particular, the information does not constitute any form of investment advice or recommendation and is not intended to be relied upon in making buying or selling decisions.  We therefore advise you to seek your own independent advice before making any such decision.