Why Bulgarian commemorative coins are an excellent investment

Only recently the BNB released an updated price list of the coins it offers, in which even the coins still available at its counters carry a considerably higher price. In September 2010 the coin “125 Years of the Unification of Bulgaria” cost 60 leva, and today at the BNB’s counters it costs 72 leva, i.e. its price has risen by 20% within two months.

According to BulgarianCoins.com, the silver and gold coins issued by the Bulgarian National Bank are an ideal solution for people who want to manage their income and savings sensibly. It turns out that buying coins is not only a collector’s passion, but also an excellent low-risk long-term investment.

A detailed comparative analysis shows that if since 2000 you had invested an average of 500 leva in every coin issued by the BNB, your investment would amount to 22,016.90 leva. At current coin prices the value of this investment portfolio would be 94,841 leva, and the profit on the investment amounts to 72,824 leva. In other words, we are talking about a total portfolio return of 330.77% over 10 years.

Which bank would offer such a return on a deposit?

Let us suppose that instead of putting your money in a bank, at the current average annual yield of around 7%, or investing it in a medium-risk fund that would bring you no more than 10% profit a year, you choose to invest part of your income in coins that are currently available at the BNB’s counters.

In the following table we have presented one possible investment portfolio made up of the coins available at the BNB’s counters. From the data provided you can get an idea of the size of the profit on an investment of 253 leva made in the period from 2007, which by 2016 is expected to amount to 900 leva.

Editor’s note: the table from the original 2010 publication has not been preserved in the archive.

The size of the profit and the average annual return of the coins issued by the BNB from 2000 to date is truly remarkable and hard to achieve with alternative financial instruments. Let us look at how the numismatic market has developed since 2000.

In 2000 the BNB issued a coin dedicated to the new millennium. The silver coin has a face value of 10 leva, a weight of 10 grams, a fineness of 925/1000 and a mintage of 6,000 pieces. The coin “Beginning of the New Millennium” is unique of its kind, because the zeros in the year written on it are left unfilled. Its price at the BNB’s counters at the time was 30 leva. Today, ten years later, with an average annual return of 26%, the price of the coin has reached 400 leva. The forecast price for 2015 exceeds 1,298.36 leva.

In the same year (2000) the coin “XXVII Summer Olympic Games, Sydney (Australia) – Weightlifting” was also issued. It is silver, with a face value of 10 leva, a weight of 23.3 g, a fineness of 925/1000 and a mintage of 20,000 pieces. At the time the BNB sold it at a price of 21 leva. This year the price of the coin on the secondary market reached 150 leva, which is seven times its original value. The average annual growth in the coin’s value is 19.57%, and for the period 2000–2010 the total profit on it in percentage terms amounts to 614%.

One of the rarest and most valuable Bulgarian gold coins is the gold coin “Golden Bulgarian Lev” from the BNB’s Bulgarian Iconography series. The gold coin has a fineness of 999/1000, weighs 15.55 grams and was issued in 2002 in a very small mintage of only 1,500 pieces. It sold out extremely quickly after huge queues in front of the BNB’s counters. If you were among those who managed to obtain this coin then, investing 500 leva (the price at the BNB’s counters in 2002), today, nine years later, you would be among the owners of that same coin, which as of 2010 you could sell for no less than 2,200 leva.

Let us suppose, however, that at the time you were not in a position to set aside 500 leva for such an investment, and look at the case of a coin issued by the BNB in that same year, 2002. The coin in question is called Survakari and is from the series of four copper-nickel coins with hand-applied colouring. All four coins in this series attracted unprecedented interest. “Survakari” has a mintage of 5,000 pieces and a denomination of 5 leva. The price of the coin at the time was 6 leva. This means that the minimal investment of 6 leva is today returned 55 times over, since the market value of “Survakari” in 2010 is 330 leva. The profit in percentage terms is a true record – 5,400%, with an average annual return of 56.9%. When this coin came out, the then governor of the BNB, Martin Zaimov, himself admitted that he had not expected such great interest, despite the fact that it was the first coloured coin of its kind. In 2016 the forecast value of the coin is 3,057.61 leva.

In second place for the highest average annual return since 2000 – 51.20% – is the coin issued in 2003 in a very limited mintage of only 2,000 pieces, “60 Years Since the Rescue of the Bulgarian Jews”. The coin is silver, with a fineness of 925/1000, weighs 23.33 grams and has a face value of 10 leva. From an initial price at the BNB’s counters of 22 leva, the value of the coin today reaches 600 leva. The profit for the period 2000–2010 is 2,632%. At the growth in value mentioned above, the coin is expected to reach a value exceeding 4,700 leva in 2016.

In 2003 the coin “The Blessing Virgin Mary” from the Bulgarian Iconography series was also issued. The coin is gold, with a fineness of 999/1000, weighs 1.55 grams and has a face value of 20 leva. Despite the fairly large mintage of 20,000 pieces, the coin was quickly sold out at the BNB’s counters. According to the Bulgarian National Bank, a record 1,485 gold coins were bought on the very first day of issue. In the case of this coin, an investment of 67 leva leads to a profit of more than 90 leva. The coin “The Blessing Virgin Mary” has an average annual return of 11.50% and is expected to be worth close to 280 leva in 2016.

Like “Survakari”, the coin “My Childhood” (copper-nickel, mintage 10,000, weight 15 grams), issued in 2003, turned into a good deal for everyone who obtained it. Its price at the BNB’s counters in the year of release was the same as that of all the coins in the hand-coloured series – 6 leva. Today the market value of this coin is 55 leva. With a calculated average annual return of 29.48%, the forecast price of the coin in 5 years will exceed the 200 leva mark.

Among the coins issued in 2004, first place for average annual return goes to the coin “St Nicholas the Wonderworker of Myra”. The mintage is not small, but interest in the coin is great. As of today the market price of the coin is 160 leva, which makes a total profit on the investment to date of 260%.

In 2005 the BNB issued the last coin in the hand-coloured series – “Baba Marta”. The coin has the same characteristics (weight, alloy, denomination) as the “Survakari” and “My Childhood” described above. At issue its price was 12 leva, which grows by 22% a year, and the value of the coin in 2010 is 40 leva.

2005 is the year in which the BNB successively released three coins whose combined average annual return reaches 30%. The coins are: “Short Track”, “The Mask of Teres” and “Baba Marta”. Let us suppose that in 2005 you had had the foresight to buy all three. In the table below you can see the parameters of such an investment.

Editor’s note: the table from the original 2010 publication has not been preserved in the archive.

The data presented clearly show that a small investment of 84.40 leva in 2005 amounts to 420 leva in 2010, and at the same cumulative annual growth will reach 1,541.46 leva in 2015.

Among the coins issued in 2006 and 2007, those with a comparatively high average annual return are:

Editor’s note: the table from the original 2010 publication has not been preserved in the archive.

Of the coins issued in 2007, special attention must be paid to the gold coin “St George the Victorious”. It exists in two versions, a 20 leva denomination (1.55 grams) and a 100 leva denomination (8.64 grams). The lighter version has a correspondingly lower rate of return, which is nevertheless by no means negligible – 17.13%. The expected value of the coin with a face value of 100 leva, at an initial price of 500 leva, is 4,909.25 leva in 2016.

In 2008 and 2009 there are two coins issued by the BNB with an average annual return of over 20%. These are the coins “100 Years of Independence” (22.80%) and “130 Years of the Bulgarian National Bank” (22.47%).

The average annual return of the other coins from the 2008 and 2009 issues ranges from 5% to 15%. Most of these coins are still available and can be bought at the BNB’s counters or at other banks authorised to offer the commemorative coins of the Bulgarian National Bank.

This year’s issues of coins with numismatic value, like the issues of 2003 and 2005, again contain coins with a very high average annual return. Two of them – “125 Years of the Unification of Bulgaria” and “Natural Phenomenon Belogradchik Rocks” – have seen their value grow by close to 40%.

In conclusion, the best way to understand why you should invest in coins is to see for yourself through your own experience. Buy, for example, the coin “Nikolay Gyaurov” from the Eminent Bulgarian Voices series at the BNB’s official price of 108 leva. If you like, even take a walk around the banks that still offer it at its old price, to make the thrill of collecting commemorative coins all the more real. Once you have obtained the coin, let it mature for a few years and enjoy the result. At present this coin has a calculated average annual return of 14.47%, which means that in 2016 you will be the proud owner of the coin “Nikolay Gyaurov”, by then worth 212.28 leva.