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The edition portfolio: Like a DAX fund for art
Article content: Hardly any other investment class combines high returns and emotional connection better than art. Just as stocks, gold and cryptocurrencies belong in every portfolio, more and more investors also see art as a must-have addition to their portfolio. However, there is a catch: While virtually anyone can invest in the 100 largest stocks or cryptocurrencies, only very wealthy people can invest their capital in the 100 most successful artists. Like other tokenization start-ups, arttrade wants to open a previously exclusive market to a wide range of investors. The fact that works of art are securitized as tokens and are therefore easier to trade...
The edition portfolio: Like a DAX fund for art
Item content:
Hardly any other investment class combines high returns and emotional connection better than art. Just as stocks, gold and cryptocurrencies belong in every portfolio, more and more investors also see art as a must-have addition to their portfolio. However, there is a catch: While virtually anyone can invest in the 100 largest stocks or cryptocurrencies, only very wealthy people can invest their capital in the 100 most successful artists.
Like other tokenization start-ups, arttrade wants to open a previously exclusive market to a wide range of investors. Securitizing works of art as tokens and thereby making them easier to trade is not new. Start-ups like Finexity and Timeless have been offering this for a long time.
What is very new, however, is that the Weng Fine Art AG edition portfolio offers a portfolio solution for art that is structured similarly to a fund. So instead of just investing in a single Gerhard Richter or Damien Hirst, you can invest your money in several so-called blue-chip works directly via the selection of the listed art trading company WFA and participate in their increase in value.
In addition to the interest in art, it is also the returns that can be convincing. In an interview with BTC-ECHO, Julian Kutzim, one of the three co-founders of arttrade, highlights the investment case: "Blue chip art in particular, i.e. the works of the top 100 artists, has proven to be very profitable with an average annual return of 8.9 percent over the past two decades. In addition, the market is relatively crisis-resistant and hardly correlates with the stock market. This makes art a perfect portfolio addition."
This form of inflation protection seems to be attracting more and more investors. Kutzim points out that, according to a Deloitte study, 85 percent of asset managers recommend that their clients invest in art.
In order for investors to receive a regulated financial product, crypto securities are issued. 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.
It is obvious to Kutzim that they chose a token-based investment solution. He cites “lower costs, faster processing, changeability and more transparency” as the main arguments. These advantages are made possible by avoiding “unnecessary intermediaries,” as Kutzim emphasizes. Apparently they can operate up to 80 percent cheaper than conventional financial service providers, assures the arttrade co-founder.
If you're looking for quick money, you won't find it in tokenized art. Ultimately, it is not the buyer who decides when the works of art are sold, but rather arttrade. Since the holding period is often five years or more, such an investment is more for long-term investors.
The minimum investment amount is also 1,000 euros, so narrow wallets have to be left out. Nevertheless, the new fund solution from arttrade in collaboration with Weng Fine Art seems to offer a good entry opportunity for investors who want to diversify their portfolio and expand it to include works by blue-chip artists.
Disclaimer: The article only reflects the personal opinion of the author. Under no circumstances does this constitute investment advice or purchase or sale recommendations.