New Art Indices To Shed Light On "Opaque" Market

Tom Burroughes

11 May 2012

Clear and widespread information about art prices and trends may not yet be at the same level as the global equity market but an international firm, artnet, has moved to shed more light on the sector with the launch of a set of indices.

The firm is rolling out artnet Indices as “the essential component of the new artnet Analytics Reports”, the company said in a statement yesterday.

The wealth management industry has seen a rise in interest in art investment owing to a rising desire for “real assets” against a backdrop of economic uncertainties and fears about inflation, for example. But while there are funds that track the art market and more knowledge about the sector, it is still a highly specialist field.

“Unlike other currently available indices that only monitor collecting categories, artnet Indices provide index returns for individual artists. These indices are powered by a sophisticated index methodology that is both sympathetic to unique art and statistically robust. Most importantly, it provides the ability to measure artists’ performance against other asset classes and benchmark against indices, such as the S&P 500, FTSE 100, Dow Jones, DAX, as well as other alternative assets such as gold,” it said.

The indices investigate individual artworks with similar core characteristics and group them according to their specific criteria, in accordance with USPAP guidelines, such as genre, date range, content, materials, size and visual similarity.

Measures

There are other measures of art prices, such as the established Mei Moses Art Index, for example. In that example, data from 21 April worldwide auction sales showed values almost back to the levels seen at the end of 2011 after prices dropped by 8 per cent in the first quarter.

Even so, despite innovations in how art prices are collated and measured, the market is still complex; collectors and investors will still need to investigate auction prices from hundreds or thousands of sales to gain an insight into a particular form of art. artnet claims its indices will improve this situation.

“We are bringing light to this market by placing indexing tools in the hands of financial professionals who need to accurately benchmark the performance of art investments. The artnet Indices provide quantitative market reports on the performance of artists like Andy Warhol or Damien Hirst, just as you might track a Fortune 500 company,” said Thomas Galbraith, director of artnet Analytics.

artnet was founded in 1989, and has more than 120 employees in New York, Paris, Berlin and London.