How Contemporary Art Has Outperformed The S&P 500 For The Past 25 Years

Contemporary art is an asset class that has proven itself to be resilient through various market cycles and has averaged an annual return of 14.1% from 1995 through 2020, according to data from Masterworks, while the S&P 500 produced total annual returns of 9.9% over the same period.

Fine art has a level of cultural importance not found in traditional asset classes and its influence has survived for generations. Throughout history, battles have been fought to capture, defend and recover artwork.

When you consider the lengths people have gone through to take possession of these treasured works, it makes perfect sense why this asset class would see consistent price appreciation.

The competition for valuable works of art has traditionally been limited to an elite circle of ultra-wealthy individuals and institutions. However, the global art market is becoming more inclusive since one of the world’s largest art buyers is allowing individuals to invest in some of the most highly sought after works on the market.

Masterworks is the first platform that allows non-accredited investors to buy shares of individual works of art. The company purchases artwork that is expected to appreciate in value, then offers shares to retail investors. *See important Regulation A disclosures.

The company holds the painting until it has identified the most opportune time to sell, which is typically within three to 10 years. Investors also have the option to sell their shares on Masterworks’ secondary market after a minimum holding period.

Most recently, Masterworks sold an Albert Oehlen painting for $2.7 Million, resulting in a 33.8% net IRR to Investors.

Current offerings include Pablo Picasso “Homme à la Pipe” (1968) and Ed Ruscha “Ripe” (1967). Shares of works from artists like Andy Warhol, Claude Monet, Banksy and Jean-Michel Basquiat are also available on the secondary market.

Find out more about the Masterworks platform.

Photo: Courtesy of Masterworks