Our “blue chip” artists index outperforms the S&P 500

[27.12.2019]

over the long term and posts a 3.3% increase for 2019

American stock markets have been super buoyant this year: the S&P 500 started the year at 2,510 points and reached 3,190 points this Tuesday, 17 December 2019. Thats a 26.2% increase over 12 months… adding more than a quarter to this fundamental index’s historical value.

Over the same period, the value of artworks by “blue chip” artists in the Art Market rose just 3.3%… a much more moderate growth rate than that of the S&P 500, but still positive, and resulting from two totally different semesters in terms of the circulation of works.

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Artprice100 © vs S&P 500 since 2000

thierry Ehrmann, founder of Artprice and CEO of ArtMarket.com: “The artists in our Artprice100 © index represent the base of the global Art Market: a particularly robust base that continues to grow, but which is not the best performing segment of the Art Market this year. The Modern artists who usually dominate this index, let other signatures take the limelight in the second half of the year. Inst’t the fact that Robert Rauschenberg, Ed Ruscha, Cimabue and Kaws stole the show from the likes of Picasso and Modigliani an excellent reason to celebrate?”

A second semester very different from the first

The first half of the year was marked by superb auction records in New York, London and Hong Kong. These records boosted the prices of several key artists who have been present in our Artprice100© for a long time, like Claude Monet, Paul Cézanne, Andy Warhol and Jeff Koons, and they actually stimulated the appetite of collectors for works by major signatures. By the end of the first semester the Artprice100© was showing a 16% increase, more or less in line with the progression of the S&P 500, up 18%.

In the second half of 2019, the secondary market supply of masterpieces was much less abundant, as we saw in the case of Pablo PICASSO for example. The brilliant Spanish painter, who alone accounts for 9.1% of the Artprice100©’s composition, posted a drop of around -8% in the price of his works. But the slowdown was not so much due to his 2019 performance, in line with his average, but rather to the exceptional results hammered the previous year. In 2018 Pablo Picasso’s auction turnover broke all records, with $745 million hammered worldwide. Whereas 13 of his works fetched over $10 million last year, ‘only’ five reached the 8-digit threshold in 2019, and only one in the second half.

Considering Picasso’s weight in the Artprice100© index, it would have taken lots of other positive annual performances by other artists in the index to offset the slowdown in his market.

Post-War and Contemporary Art on a firm footing

The sale of Ed RUSCHA’s painting Hurting the Word Radio # 2 (1964) on 13 November 2019 contributed to raising Ed Ruscha’s price index by 11% this year. But weighing just 0.6% in the composition of our Artprice100©, that good performance had only a small impact on our portfolio. Similarly, the performances of Nicolas de Staël and Albert Oelhen (each weighing less than 0.2%) contributed only very modestly to the growth of the Artprice100©.

Unfortunately, the best auction records of the second half of 2019 had little or no impact on the index since the new stars of the market – starting with Kaws and Banksy – have not yet joined its composition. Likewise for the exceptional Old Master results that rocked French auction rooms in the second half of the year: Cimabue, the Master of Vyšší Brod, and Artemisia Gentileschi… artists whose works are obviously far too rare on the market to be considered “blue-chip” artists.

Indeed, it is extremely encouraging to note that in a slow period, when masterpieces by the Art Market’s major signatures are scarce, the Artprice100© index continues to progress.

This represents another quality of this index, in addition to that – even more important – of its resilience to financial crises. During the subprime crisis, following the collapse of Lehman Brothers in 2008, the S&P 500 posted major losses whereas the Artprice100© lost only a quarter of its value.

Fortunately, 2020 is already looking a lot stronger for the high-end Art Market. The dispersion of the Macklowe collection, in particular, should benefit ‘blue-chip’ artists and the Artprice100©.

SEE ALSO : « The art market bue chip artists… »