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Art As An Alternative Asset Investment
While world capital markets remain extremely volatile with high risk, the market for art has grown steadily. Increasing world wealth and the emergence of new private and institutional buyers, indicate that the demand for art should continue to grow. Since 1985 the AMR Art 100 index has provided an average annual return of 10%. During the same period the MSCI world equity index has returned an average annual return of 5.9%. I should me noted that the higher the returns also come with lower volatility. Fine art as an asset class offers several further attractive characteristics including generally low correlation with other assets such as stocks, bonds, property and gold. This low correlation makes art an excellent tool for portfolio diversification. Furthermore given current concerns about a depreciating local currency, high government indebtedness and a loose western economic monetary policy, art can provide inflation and currency depreciation protection as a tangible real asset. Art has shown that it can perform better in an inflationary environment than equities.
ArtEx is a privately offered investment fund dedicated to the generation of returns through the acquisition of and the disposition of art. There are a number of unique characteristics that should be considered by prospective investors.
1. Art fund investments are long term:
An investment in the Fine ArtEx Fund is a long-term undertaking with investors committing to make capital contributions to the fund for a period of between three to five years. These investors are normally not subject to a capital return for between the similar three to five years.
2. The Fine ArtEx Fund`s unique business model of leasing art works to corporate clients, enables the fund to generate a cash flow that will be shared amongst investors in the form of a bi-annual dividend. This unique feature sets the Fine ArtEx Fund apart from most other art fund investments.
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