The edition portfolio: Like a DAX fund for art - arttrade enables investment in blue-chip works for a broad range of investors

The edition portfolio: Like a DAX fund for art - arttrade enables investment in blue-chip works for a broad range of investors

The edition portfolio: Like a DAX fund for art

Art is considered an asset class that can combine high returns and emotional connection. Similar to stocks, gold and cryptocurrencies, more and more investors are seeing art as an important addition to their portfolio. But there's a catch: While virtually anyone can invest in the biggest stocks or cryptocurrencies, only wealthy people are able to invest their money in the 100 most successful artists.

In order to open this exclusive market to a wider range of investors, the startup arttrade wants to tokenize works of art and thereby make them more tradable. Already established startups such as Finexity or Timeless offer similar solutions. The difference, however, is that with the Weng Fine Art AG edition portfolio, arttrade offers a portfolio solution that is structured similarly to a fund. Instead of just investing in a single work of art by Gerhard Richter or Damien Hirst, investors can invest in several so-called blue-chip works by selecting the listed art trading company WFA and benefit from their increase in value.

In addition to the interest in art, the returns also play a convincing role. According to Julian Kutzim, one of the three co-founders of arttrade, blue-chip artworks, i.e. works by the top 100 artists, have proven to be very profitable over the last two decades, with an average annual return of 8.9 percent. The art market is also relatively crisis-resistant and hardly correlated with the stock market. This makes art a perfect addition to the portfolio. A Deloitte study shows that 85 percent of asset managers recommend their clients invest in art.

In order to offer investors a regulated financial product, arttrade issues crypto securities. These are based on the Electronic Securities Act (eWpG), which has provided a legal framework for securities on a blockchain in Germany since June 2021. The decision for a token-based investment solution is obvious as it is associated with lower costs, faster processing, adaptability and more transparency. By avoiding unnecessary intermediaries, up to 80 percent of costs can reportedly be saved compared to conventional financial service providers.

It is important to note that art as an investment does not promise quick profits. The sale of the works of art is not in the hands of the buyer, but rather by arttrade. The holding period is often five years or longer, which is why such an investment is more suitable for long-term investors. The minimum investment amount is 1,000 euros, so people with little capital are excluded. Nevertheless, arttrade's new fund solution in collaboration with Weng Fine Art seems to be a good option for investors who want to diversify their portfolio with works by blue-chip artists.

Disclaimer: The article only reflects the personal opinion of the author. It is not investment advice or buying and selling recommendations.