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Year in Review: Fractional Platforms by the Numbers

Year in Review: Fractional Platforms by the Numbers
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Note: This data was compiled from Friday (12/23) of last week. As fractional values are wont to act with great volatility, specific assets may have differing values compared to today. Insights from analyzing FY2022 data will be sure to be more wide-reaching than a few quickly moving asset prices.

Fractional markets had, suffice to say, quite an awful year. It is times like this that we must reflect back on decisions made throughout the year by both fractional platforms and investors alike. Let us start off with a broad look at performance over the year across the three major fractional exchanges Rally, Public, and Collectable.

Best Performing Assets

  1. 2003 Serena Williams NetPro Elite Glossy (BGS 9.5): 211.83%
  2. Pappy Van Winkle Bourbon Assortment - #PAPPY1: +200.00%
  3. 1988 NES Castlevania II: Simon’s Quest - #CASTLEII: +122.78%

Worst Performing Assets

  1. World of Women #2221 - #WOW2221: -89.29%
  2. World of Women #6586 - #WOW6586: -87.00%
  3. Bird | Dr. J | Magic 1980 Scoring Leaders Basket - 2x: -86.63%

Best Performing Asset Class

  • Wine & Spirits: +17.28% (avg. return)

Worst Performing Asset Class*

  • NFT: -58.75% (avg. return)

First, let us quickly take stock of what we are looking at here. 736 assets have actively traded on one of the three platforms at some point in the year. Sports cards take up the lion’s share of assets clocking in at 292 in total, or about 40%. Both average and median returns were, well, not great. The S&P’s ~20% decline over 2022 looks quite good compared to most fractional assets. 

* (Sneakers are the #1 loser, but the sample size is too small)

Overall Fractional Performance

Sneakers are representing only the losses of a single asset, a complete set of Yeezy 350s–likely due to a number of factors including the recent behavior of one Mr. Kanye West, the artist’s relationship with Adidas (or lack thereof), and the overall decline of the secondary sneaker markeT. So for all intents and purposes, the biggest loser of the group is none other than everyone’s favorite collectible category: Non-Fungible Tokens.

Ex-Sneakers, NFTs are by far the worst performing asset class– the 39 assets generated -58.75% returns overall. All of these negative returns resulted in $4.5 million in losses across the category. For reference, the next worst performing category, video games, returned -43.77% to shareholders. These losses only came to more than $1.7 million in aggregate. Per asset, NFTs lost an average of approximately $78,000 more than video games. Said another way, NFTs only represent around 5% of all assets, but the category represents 11.21% of all losses. Yikes.

RALLY

Rally

Best Performing Assets

  1. Pappy Van Winkle Bourbon Assortment - #PAPPY1: +200.00%
  2. 1988 NES Castlevania II: Simon's Quest - #CASTLEII: 122.78%
  3. 2018 Panini National Treasures Josh Allen Rookie Card - #18ALLEN: +91.67%

Worst Performing Assets

  1. World of Women #2221 - #WOW2221: -89.22%
  2. World of Women #6586 - #WOW6586: -87.00%
  3. Meebit #11275 - #MEEB11275: -86.25%

Best Performing Asset Class

  • Wine & Spirits: +17.28% (avg. return)

Worst Performing Asset Class

  • NFT: -68.98% (avg. return)

The largest platform by both number of assets and total value, Rally, shares many of the same themes as the overall numbers. The bottom three performers are all laid out in the same order: NFT, Video Games, Card Games. On the other end, Rally also shares the category in the top spot–Wine & Spirits. The category is being led by a huge price increase from a set of Pappy Van Winkle Bourbon bottles; a Sotheby’s sale recently sold a 23-year bottle for a record $52,500. Wine & Spirits experiencing solid gains in one of the worst market environments in decades says a lot about the quality of this asset class compared to the field. 

Rally Fractional Performance

Rally has been regularly IPOing NFTs throughout the year, seemingly to the dismay of their users. 8 out of the 10 worst performing assets are NFTs–could be 9 if you count Gary Vee’s hand drawn squirrel, #VEEFRIEND. The downtrend of NFTs has surely hurt Rally more than the competition, the category represents just 7.5% of the assets on the platform, yet the category’s losses account for nearly 28% of all losses on Rally. Of the $4.5 million in total fractional losses in the category, Rally represents $4.1 million of those losses; around 90% of losses in fractionally-owned NFTs occurred on their platform. Yikes, again.

COLLECTABLE

Best Performing Assets

  1. Muhammad Ali WBC Title Belt | Rumble in the Jungle: 87.95%
  2. Alexander Ovechkin '05 The Cup 4-Color RPA BGS 9.5 #'d /99 - 290: +76.85%
  3. Jasson Dominguez '20 Bowman Chrome Orange Refractor BGS 9.5 - 213: +51.57%

Worst Performing Assets

  1. Bird | Dr. J | Magic 1980 Scoring Leaders Basket - 2x: -86.63%
  2. Paul Pierce 2010 All Star Game Jersey - Photomatched: -83.99%
  3. Tom Brady ‘01 Season Ticket Booklet - Replaces Bledsoe, first NFL Start & Win - 314: -83.30%

Best Performing Asset Class

  • Sports Memorabilia: -32.22% (avg. return)
  • By Sport - Tennis: -20.15% (avg. return)

Worst Performing Asset Class

  • Sports Cards: -32.28% (avg. return)
  • By Sport - Soccer: -44.45% (avg. return)

Ah, finally a nice break from NFTs! Collectable had a similarly disappointing year. Average and median returns are slightly worse than the average on Public and Rally. Aside from very high end sales of classic cards, sports cards had a rather poor year. It is worth noting that assets in Collectable’s two categories (Sports Cards and Sports Memorabilia) had nearly identical average returns at around -32%. The difference between the sports themselves is much more noticeable. 

Collectable Performance

Soccer, surprisingly in a year with a very highly-viewed World Cup, fell the farthest. Only made up of 7 assets, 6 of them all fell a minimum of -45%; accruing nearly half a million dollars in losses for the asset class. 

Next sport down is basketball, racking up 42% of losses on only 34% of the population of traded assets on Collectable. It is no secret that modern basketball cards have had a terrible year–this looks to have spread into fractional quite noticeably. 

Hockey is the closest Collectable came to a category breaking into positive territory. Falling only 14.78% is actually quite a feat for such an awful market, both in collectibles and more broadly. Almost entirely pulled up by ‘Alexander Ovechkin '05 The Cup 4-Color RPA BGS 9.5 #'d /99’ which moved up 76% on the year–the other 8 cards from the sport? All losers. This is representative of the platform as a whole: 28 assets with positive returns and 192 with negative returns. If a category is approaching positive returns you can likely be sure that it is dependent on one specific high-flyer.

PUBLIC

Best Performing Assets

  1. 2003 Serena Williams NetPro Elite Glossy (BGS 9.5) - SC33: +211.83%
  2. Cape Woman by Katherine Bradford - ART9: +75.00%
  3. Marvel Daredevil #1 (CGC 9.6) - CB9: +58.37%

Worst Performing Assets

  1. 2004 Panini Sports Mega Cracks Barcelona Campeon Lionel Messi (PSA 10): -85.66%
  2. 1996 Bowman's Best Atomic Refractor #R23 Kobe Bryant (BGS 9.5): -85.35%
  3. Supreme Skateboards II "The Last Supper" and "Spots": -80.57%

Best Performing Asset Class

  • Comic Books: +12.55% (avg. return)

Worst Performing Asset Class

  • NFT: -41.62% (avg. return)

‍Public is a little messy compared to the other two, as many of their assets spent the better part of this year either on Otis or in limbo as they awaited either sale or the transition to Public.com. As a result of buying Otis, Public elected to sell off a certain percentage of these assets; many of them at a significant loss. The platform’s best performer, the ;2003 Serena Williams NetPro Elite Glossy (BGS 9.5)’, was bought out in February for a healthy 90% return on its IPO price. Sadly, the same cannot be said for the worst performing asset on Otis/Public, ‘2004 Panini Sports Mega Cracks Barcelona Campeon Lionel Messi (PSA 10)’. The card generated an embarrassing  -90% since its IPO and -85% returns on the year. Increasing their hold time by just a few months would have likely seen them benefit from the Argentine hoisting the world cup.

Public/Otis Performance

Comic Books, the lone winner of the bunch, driven higher by the buyout of ‘Marvel Daredevil #1 (CGC 9.6)’ as well as the higher trading prices of their copies of Hulk and X-Men. Of the 8 comic books, 5 generated positive returns on the year, a surprising majority when most categories depend on the returns of 1 or 2 assets to drive gains.

Video games took the second biggest hit due to the mass buyout of Otis objects. 14/17 of the assets were sold during the rocky Otis/Public transition. The 3 remaining on the platform are all underwater by at least -34%. The market for graded video games has not been having the best year, the Altan Insights Fractional Video Games Index is down 62% for 2022. Comprising only 16% of the assets on Public, video games represented 37% of the losses. The sell-off of these previously Otis-owned assets hurt the asset class’ returns, but even the assets that made it through to the other side did not recover.

Not much to be said here that has not already been said on NFTs. Similar to Rally, NFTs represent a small percentage of total assets (8%), but an outsized percentage of losses (19%). ‘The Grimes NFT Collection’ was the sole winner–finding an almost 10% gain. The remaining assets in the category averaged returns of -48%. Will this extreme underperformance in the category convince marketplaces to avert focus to more tested alternative assets? So far the answer has been no, but we shall see what the new year brings.

This year has been… interesting… for fractional. No real way to spin it. Prices went down and it was not pretty. We should try to take solace in the few categories that did produce respectable returns. Wine continues to prove that it is one of the few asset classes that can survive terrible markets. Comic books and memorabilia may be negative on the year, but the high end of both categories continues to have impressive sales. Hopefully fractional in 2023 will turn around with IPOs of high quality assets with a track-record of positive returns. Even if they do not, it is hard to imagine a worse year than this one; only time will tell.

December 23, 2022
By 
Keenan Flack
Altanin post bacgraund

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