Victoria Dobrynskaya, the School of Finance Assistant Professor, co-authored the article in Research in International Business and Finance Journal

The School of Finance assistant professor Victoria Dobrynskaya co-authored the article “Lego: The Toy of Smart Investors”, which was published in the latest issue of “Research in International Business and Finance” journal.

 

Abstract:

We study financial returns on alternative collectible investment assets, such as toys, using LEGO sets as an example. Such iconic toys with diminishing over time supply and high collectible values appear to yield high returns on the secondary market. We find that LEGO investments outperform large stocks, bonds, gold, and alternative investments, yielding an average return of at least 11% (8% in real terms) in the sample period 1987–2015. LEGO returns are not exposed to market, value, momentum, and volatility risk factors but have an almost unit exposure to the size factor. A positive multifactor alpha of 4%–5%, a Sharpe ratio of 0.4, a positive return skewness, and low exposure to standard risk factors make the LEGO toy and other similar collectibles an attractive alternative investment with good diversification potential.