You’ve probably invested in stocks, property, gold and much more back home. But did you ever imagine that the piece of art you looked over in the exhibition during your visit home could be an asset in your investment portfolio? The answer is yes. Surprising but true! The Indian art market has matured to the extent that it is offering good long-term investment options! Read on to explore how art can diversify assets in your investment portfolio.
What makes art a great investment is the fact that it is not volatile. This is exactly what makes it different from other investment instruments. According to art experts, art is the only form of investment where prices don’t come down. The advantages of investing in art don’t end right here, though. Art is not likely to be affected by the whims of the economy. Also, you get the aesthetic benefit of having bought something that you enjoy. These advantages have led to the growing popularity of the idea of art as a long-term investment option. A majority of buyers of contemporary Indian art have always been foreign nationals or Indians settled outside India.
So you’ve finally decide to go ahead and invest in art. Well, there are a couple of investment options that you may want to consider if you believe that investment in Indian art can fetch you better returns.
Art Funds
You need not buy art in its physical form. You have the option of electronically investing in units of art funds. The rise in demand for Indian art has prompted some art houses to launch mutual funds to ease investments in the Indian art market. A few examples are funds launched by institutions such as Copal Art, Edelweiss Securities, Crayon Capital, and Osian’s Connoisseurs of Art. These funds have attracted investments in the range of up to 2.5 billion USD. You can monitor the prices of these funds from any NSE terminal. Once you are convinced about the performance of the art fund, you can buy the required units through your demat account.
The money collected through these art funds is used to buy actual art by renowned artists. Paintings and serigraphs are then held with the art house that launches these funds.
Paintings and Serigraphs
If you believe in investing in art in its physical form, you can contact several art houses which have branches in many cities across countries. For example, the Bodhi Art Gallery has branches at New Delhi, Mumbai, New Singapore, and New York. Likewise, you can look out for other galleries, such as Arts India, which sell contemporary Indian art. The prices of art can vary from USD 2,500 to USD 7, 31,000. You can also pick up some exquisite pieces at auctions.
A word of caution before you take the plunge: you should always keep in mind that art is an illiquid asset. Also, not all pieces done by a renowned artist are masterpieces. You must be a connoisseur to recognize a masterpiece. Further, art needs maintenance, which can be expensive. Also, art requires proper storage and security. Importantly, unlike other assets, it does not give you dividends, bonuses, or additional income.
Have you ever traded in Art before? How do you pick what to invest in? Which are the artists to watch out for? Does trading in art make you lose your love for the work itself? Does it make you analyze the work a bit too much?
Source: Economic Times
Thanks and Regards,
Sanchari Sinha,
Intern at DENIP Consultants Pvt. Ltd.
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