Why invest in art?

Art as an investment is up there with the best performing asset classes in recent years.

Why invest in art?

First and foremost, blue-chip art has strong historical performance, with average annual growth of 8.9% since 2000 – over 3x better than stock markets like the S&P 500 according to data from the ArtPrice 100© Index1. Art as an investment is up there with the best performing asset classes in recent years.

There is a lot of art to choose from – the market size reached $67.8 billion in 20222 .This is just the value of art sold in a year; Deloitte estimates that there is $1.7 trillion3 in art around the world. This compares to $9.8 trillion in private equity funds4.

There is also something very special about art compared to many other investments you may consider. Most of us will have an emotional reaction when we are presented with a new piece of art. Whether you love a piece or hate it, the chances are it is likely to spark some debate. Investing in art is the same – it is the one investment you will never tire of talking about.

What role can art investment play in a portfolio?

Art can be an important part of your investment portfolio. It has low correlation with traditional investments, such as stocks and bonds, and can be a hedge against inflation. Finance professionals have come to realise the benefits of art as a diversification tool – 85% of wealth managers believe art investment should be included in a balanced portfolio5.

Art’s historic performance has also shown it to be an effective store of value during economic instability and downturns. Analysis of art’s performance during a recession demonstrated it didn’t suffer as much, and recovered much quicker, than more traditional investments.

A recent survey of wealthy investors conducted by Mintus found that 42%6 include art in their portfolio. Where art was included in an investment portfolio, it accounted for 6% of portfolio value on average. Of the wealthy investors with a portfolio of greater than $5m in assets, 80% had art in their portfolio.

What are the best paintings to invest in?

Mintus has a sophisticated sourcing model and has developed a target list of potential artist offerings, compiled through an analysis of market performance and artwork investment criteria. Our main criteria are:

1. The artist must have a sustained auction track record, as this is a strong indicator of an artist’s secondary market.

2. The artist must have international appeal in order to maximise the pool of potential buyers worldwide.

3. The artist’s market must show recent price velocity, a gauge of an artist’s market momentum.

4. The artist must have positive exhibition trajectory, a gauge of an artist’s cultural value.

As part of this ongoing work, Mintus uses a wealth of data around artists’ sale prices that can be a useful aid to art investment decisions, which we make available to prospective investors who sign up to our platform.

Based on this data and the extensive experience of our art experts, Mintus focusses on Post-War & Contemporary Art. These categories have grown significantly faster than the overall art market. Since 1998, the ArtPrice Contemporary Art Index has grown by over 358% and the ArtPrice Post-War Art Index has grown 267%. Over the same period, the ArtPrice Global Art Index has grown by only 18%.7

How does fractional art investment work?

Fractional art investment allows you to invest in paintings worth millions alongside other investors, to take advantage of the attractive potential returns and to diversify your portfolio. Mintus art experts take care of sourcing, selecting, authenticating and valuing art investments on your behalf. Removing these barriers allows you to invest in this attractive asset class starting from a minimum investment of $3,000.

It is important to remember that we are talking about physical art, and not NFTs (non-fungible tokens). The erratic volatility of the NFT market is a far cry from the steady uptrend of the traditional art market.

How can I learn more about art as an investment?

You can read more about how wealthy investors include art in the portfolio here, or review our detailed glossary of terms here. To see the current art investment opportunities offered by Mintus, sign up and create your free account.

Footnotes
  1. ArtPrice, ‘The ArtPrice 100© Index of Blue-chip artists up 3% over 2022’, 30 Jan 2023
  2. UBS & Art Basel Art Market Report 2023
  3. Deloitte & ArtTactic, Art & Finance Report 2019
  4. WealthBriefing, ‘Will Private Markets Overtake Public Markets?’, 16 August 2022
  5. Deloitte & ArtTactic, Art & Finance Report 2021
  6. Mintus surveyed 125 UK, US and UAE investors with >$1m investible assets in January 2023
  7. ArtPrice Global Indices, data correct as of 1st October 2022

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