Art's rate of return and lack of correlation with other asset classes is making it an increasingly popular investment, a new report from Citi said.
Leonardo da Vinci's "Salvator MundiWhile these numbers are attention grabbing, there's also a robust market at much lower prices. Citi found that works under $50,000 actually offer "the best performing price point from both a return and a risk per unit of return basis," adding that "there is no disadvantage from a return perspective to having a small purse."Using data from Masterworks.
Citi said that the relative outperformance of post-war and contemporary art is likely because it currently "commands the largest share of annual transaction volume," and "appears to attract the most demand from new entrants to the market." "While the relationship has been far from perfect, art prices have tended to move in line with broad shifts in real interest rates," the firm said. "Periods of falling and/or low real rates have coincided with rising art prices."
Overall, the firm said that art has been "an excellent store of wealth over all time periods" since it easily exceeds inflation.A lack of transparency around sales has been a longstanding hurdle for the art market, but Citi said that could be about to change thanks to technological advancements like blockchain.
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