{"id":126444,"date":"2021-05-27T13:35:00","date_gmt":"2021-05-27T13:35:00","guid":{"rendered":"https:\/\/precoinnews.com\/?p=126444"},"modified":"2021-05-27T13:35:00","modified_gmt":"2021-05-27T13:35:00","slug":"theres-a-unique-opportunity-in-art-which-has-beat-the-sp-500-over-25-years-asset-manager-says","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/theres-a-unique-opportunity-in-art-which-has-beat-the-sp-500-over-25-years-asset-manager-says\/","title":{"rendered":"There\u2019s a \u2018unique\u2019 opportunity in art, which has beat the S&amp;P 500 over 25 years, asset manager says"},"content":{"rendered":"<ul>\n<li>Contemporary art has offered an annual return of 14% over the last 25 years, as of December 2020, versus a 9.5% annual return from the S&amp;P 500, according to the Citi Global Art Market chart.<\/li>\n<li>Over the last quarter-century, contemporary art \u2014 defined as works created from 1945 onwards \u2014 recorded losses in only 4% of cases, over 3-year investment periods.<\/li>\n<\/ul>\n<p>In this article<\/p>\n<ul>\n<li><span>.SPX<\/span><\/li>\n<\/ul>\n<p>LONDON \u2014 Contemporary art as an investment has outperformed the S&amp;P 500 over the last 25 years, and one asset manager argues that it still presents a &quot;unique&quot; opportunity for investors.\u00a0<\/p>\n<p>Contemporary art has offered an annual return of 14% over the last 25 years, as of December 2020, versus a 9.5% annual return from the S&amp;P 500, according to the Citi Global Art Market chart, cited by fine art investment company Masterworks.\u00a0<\/p>\n<p>Looking ahead, John Plassard, deputy director at asset manager Mirabaud, told CNBC&#x27;s &quot;Squawk Box Europe&quot; on Thursday that there was &quot;a lot of growth to come&quot; from contemporary art.\u00a0<\/p>\n<p>He described it as &quot;one asset that seems to have stood the test of time and escaped the grip of volatility&quot; and said it was an &quot;often-misunderstood investment theme&quot; in a note earlier this month.\u00a0<\/p>\n<p>His arguments in favor of the asset class include the fact that contemporary art has seen fewer periods of losses than global equities, gold and the U.S. housing market.\u00a0<\/p>\n<p>Over the last quarter-century, contemporary art \u2014 defined as works created from 1945 onwards \u2014 recorded losses in only 4% of cases, over 3-year investment periods, according to analysis cited in Mirabaud&#x27;s note. In contrast, the S&amp;P 500 and global equities were in the red 24% of the time, U.S. housing incurred losses in 20% of cases and gold fell 40% of the time.\u00a0<\/p>\n<p>Plassard also pointed out that contemporary art has a low correlation to more traditional investments, meaning it is unlikely to rise and fall with those assets.\u00a0<\/p>\n<p>&quot;Art has also low correlation with other classes so it&#x27;s a unique investment and you have minimum losses \u2014 if you choose the right one of course,&quot; he told CNBC.\u00a0<\/p>\n<p>And because it&#x27;s a real asset, it can offer a level of protection against the risk of rising inflation, Plassard added, which is something which has been a major concern for investors of late.\u00a0<\/p>\n<p>Overall, he said that contemporary art offered a way to diversify investments, but that it does involve &quot;risks and costs depending on the means chosen to acquire a work.&quot;\u00a0<\/p>\n<p>The cost of insurance can be high, for example, and there is also the risk of forgery, theft or damage. In addition, the value of a piece of art can fluctuate depending on whether the artist remains in style.<\/p>\n<h2>Ways to invest in art<\/h2>\n<p>There are a number of different ways to invest in the space, according to Plassard. First of all, investors can simply buy a work of contemporary art \u2014 although this can be tricky as buyers either have to bet on unknown artists, or pay dearly for a more established name.<\/p>\n<p>Art funds are another option, Plassard said, which allow investors to own parts of pieces of art. For instance, Masterworks is a fund manager that acquires artwork at auctions, then creates a holding company to store, promote and resell the pieces at a profit. It registers the holding company with the U.S. Securities and Exchange Commission and issues shares, Plassard explained.\u00a0<\/p>\n<p>Blockchain technology has also created the tokenization of art, Plassard said, alluding to nonfungible tokens (NFTs) which can offer investors another way to buy a part of a piece of art.\u00a0<\/p>\n<p>Artwork can be &quot;defragmented&quot; into thousands of digital tokens and then issued to buyers, he said, adding that the digitization of the artwork into exchangeable tokens makes it more of a liquid asset. NFTs boomed in the first-quarter of the year, with total sales of tokens topping $2 billion in the first quarter.\u00a0<\/p>\n<p>Investors can also buy shares in the companies that provide information on the art market and sell works online, like ArtMarket. However, Plassard said in the note that these companies &quot;face very strong competition, which, among other things, explains their sharp declines.&quot;<\/p>\n<p>Enjoyed this article?<br \/>For exclusive stock picks, investment ideas and CNBC global livestream<br \/>Sign up for\u00a0<strong>CNBC Pro<\/strong><br \/>Start your\u00a0free trial now<\/p>\n<p>Source: <a href=\"https:\/\/www.cnbc.com\/2021\/05\/27\/there-are-unique-opportunities-in-art-says-one-asset-manager.html\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Contemporary art has offered an annual return<\/p>\n","protected":false},"author":3,"featured_media":126443,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23051],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>There\u2019s a \u2018unique\u2019 opportunity in art, which has beat the S&amp;P 500 over 25 years, asset manager says - 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