The Art Market’s Blue-chip Artists Yield Nearly as Much as the Top Performing Companies in the American Economy

[15 Jul 2019]

thierry Ehrmann, Artprice’s founder/CEO, highlights the art market’s excellent performance in H1 2019: « A collector who, at the start of this year, invested in the 100 most successful artists of the last five years (2014-2018), would already be looking at a value accretion of almost a sixth in the value of his/her portfolio. »

Artprice100(C) versus S&P 500 since 2000 (PRNewsfoto/Artprice.com)

artprice100-juillet19

The Artprice100 © index gained +16% over the first half of 2019 while the S&P 500 added +18% over the same period. The similarity in the performances between the American financial markets and a portfolio of works by the world’s top performing artists (defined in a purely objective manner) proves the undeniable attractiveness of the Art Market as an alternative investment.

Fewer transactions

The performance of the Artprice100© over the first half of 2019 was driven by exceptionally strong demand, barely satisfied by supply. The supply/demand imbalance, generated a rapid increase in value, particularly on works by the 100 top performing artists on the global secondary art market.

The turnover slowdown recorded in H1 2019 by major auction houses, including Sotheby’s (-9%) and Christie’s (-28%), reflects a less dynamic high-end market than in previous years. However, prices have shown no signs of fatigue and the contraction in the volume of sales is a reminder that the art market is directly dependent on the number of works in circulation.

In a financial context of sustained negative or near-zero refinancing rates, some collectors are probably preferring to hold certain artworks and not cash in on investments that remain highly competitive. Moreover, the persistence of extremely high transaction costs, both in galleries and in auction rooms, is discouraging short holding periods (under five years), and tempting some collectors to consider private transactions as an alternative.

The Artprice100© index driven by Warhol, Zao Wou-Ki and Wu Guanzhong

Heavily weighted in our Artprice100© index with 9.1% of the portfolio, Pablo Picasso has not contributed to its value accretion for several years. As we have seen over the last four years, his prices contracted -2% in the first half of 2019.

However, Andy Warhol, Fu Baoshi, Zao Wou-Ki and particularly Wu Guanzhong have all clearly enjoyed value accretion, providing the main thrust for the progression of our Artprice100© index in H1 2019. Without setting any new auction records, these artists have all enjoyed strong price inflation. The sale of major works by these artists will no doubt confirm the trend.

On 2 June last, a large drawing by Wu Guanzhong entitled Lion grove garden (1988) fetched $20.8 million at China Guardian. It was previously acquired for $17.8 million on 3 June 2011 at Poly Beijing. Adding 17% over the last eight years, the drawing generated, in financial terms, an average annual return of +1.9%. However, another Guanzhong resale suggests that the bulk of the value accretion on his works has occurred in the last 6 months: an important Guanzhong work entitled Two Swallows was purchased for $7.1 million on 3 June 2011 (at the same sale as Lion grove garden) and fetched $7.8 million in December 2018, an increase of just +9.8%.

Paul Cézanne and George Condo

Investments in Modern artists carry the least risk and demand for their work is continuing to grow steadily offering attractive returns over the long term. Claude Monet and Paul Signac have both signed new auction records this year. Similarly, 2019 is already proving to be a superb year (the best since 2000) for Paul Cézanne. His painting Bouilloire et fruits (c. 1888-90), acquired for $29.5 million in 1999, fetched $59.3 million on 13 May 2019 at Christie’s New York, generating an average annual ROI of 3.6% over 20 years.

At the other end of the spectrum, Contemporary artists offer striking returns in the medium and short term. The most spectacular entry into the composition of the Artprice100© index this year is undoubtedly George Condo. The American artist enjoyed a massive secondary market success in 2018with 78 paintings and 34 drawings selling for more than $63 million, and on three continents (America, Europe and Asia)! The Condo phenomenon has been clearly illustrated by a number of rapid resales of small works including Soft Green Abstraction (1983), which was purchased for $17,000 in April 2017 in Munich and resold a year later in New York for $46,000.

In total, there were seven changes this year in the composition of the Artprice 100© index.

In

George CONDO (1957)

Giorgio MORANDI (1890-1964)

Robert MOTHERWELL (1915-1991)

Jean-Paul RIOPELLE (1923-2002)

Rufino TAMAYO (1899-1991)

Frank AUERBACH (1931)

Hans ARP (1886-1966)

Out

HUANG Binhong (1865-1955)

HUANG Zhou (1925-1997)

Anish KAPOOR (1954)

LI Keran (1907-1989)

XU Beihong (1895-1953)

Pieter II BRUEGHEL (c.1564-1637/38)

Giorgio DE CHIRICO (1888-1978)

Four women… and two Old Masters

Unfortunately, we see no change regarding female artists. This year again, only four of the artists in the Artprice100© are women: Yayoi Kusama (Japan), Joan Mitchell (US), Louise Bourgeois (France) and Barbara Hepworth (UK). Yayoi Kusama now represents 1.3% of the index compared with 0.9% last year. Her price index rose 20% in H1 2019.

The relegation of Pieter Brueghel II for reasons relating to market liquidity has exacerbated the rarity of Old Masters in the index. Numerically, the composition of the index is dominated by Modern artists, numbering 49, followed by Post-War artists (29), Contemporary artists (12), 19th century artists (8) and lastly… Old Masters (only 2).

Composition of Artprice100© index for H1 2019

Artist – Share – Period

Pablo PICASSO (1881-1973) – 9.1% – Modern
Andy WARHOL (1928-1987) – 6.4% – Post-War
Claude MONET (1840-1926) – 4.5% – 19th Century
QI Baishi (1864-1957) – 3.9% – Modern
Jean-Michel BASQUIAT (1960-1988) – 3.7% – Contemporary
Gerhard RICHTER (b. 1932) – 3.3% – Post-War
ZAO Wou-Ki (1921-2013) – 2.9% – Post-War
FU Baoshi (1904-1965) – 2.5% – Modern
Alberto GIACOMETTI (1901-1966) – 2.4% – Modern
Amedeo MODIGLIANI (1884-1920) – 2.2% – Modern
Cy TWOMBLY (1928-2011) – 2.2% – Post-War
WU Guanzhong (1919-2010) – 2.1% – Modern
Roy LICHTENSTEIN (1923-1997) – 2.0% – Post-War
Lucio FONTANA (1899-1968) – 1.9% – Modern
Alexander CALDER (1898-1976) – 1.8% – Modern
Marc CHAGALL (1887-1985) – 1.8% – Modern
Joan MIRO (1893-1983) – 1.7% – Modern
Willem DE KOONING (1904-1997) – 1.7% – Modern
Henri MATISSE (1869-1954) – 1.5% – Modern
Fernand LÉGER (1881-1955) – 1.4% – Modern
Christopher WOOL (b. 1955) 1.4% – Contemporary
Yayoi KUSAMA (b. 1929) – 1.3% – Post-War
Jean DUBUFFET (1901-1985) – 1.3% – Modern
René MAGRITTE (1898-1967) – 1.2% – Modern
Peter DOIG (b. 1959) – 1.2% – Contemporary
Wassily KANDINSKY (1866-1944) – 1.2% – Modern
Jeff KOONS (b. 1955) – 1.2% – Contemporary
David HOCKNEY (b. 1937) – 1.1% – Post-War
Henry MOORE (1898-1986) – 1.0% – Modern
LIN Fengmian (1900-1991) – 0.9% – Modern
CHU Teh-Chun (1920-2014) – 0.9% – Post-War
Paul GAUGUIN (1848-1903) – 0.9% – 19th Century
Pierre-Auguste RENOIR (1841-1919) – 0.8% – 19th Century
SAN Yu (1895-1966) – 0.8% – Modern
Richard PRINCE (b. 1949) – 0.8% – Contemporary
Sigmar POLKE (1941-2010) – 0.7% – Post-War
Joan MITCHELL (1926-1992) – 0.7% – Post-War
PU Ru (1896-1963) – 0.7% – Modern
Auguste RODIN (1840-1917) – 0.7% – 19th Century
Edgar DEGAS (1834-1917) – 0.7% – 19th Century
Paul CÉZANNE (1839-1906) – 0.7% – 19th Century
Yves KLEIN (1928-1962) – 0.6% – Post-War
Camille PISSARRO (1830-1903) – 0.6% – 19th Century
Richard DIEBENKORN (1922-1993) – 0.6% – Post-War
Ed RUSCHA (b. 1937) – 0.6% – Post-War
Keith HARING (1958-1990) – 0.5% – Contemporary
Martin KIPPENBERGER (1953-1997) – 0.5% – Contemporary
Louise BOURGEOIS (1911-2010) – 0.5% – Modern
Alberto BURRI (1915-1995) – 0.5% – Modern
Frank STELLA (b. 1936) – 0.5% – Post-War
Damien HIRST (b. 1965) – 0.4% – Contemporary
Egon SCHIELE (1890-1918) – 0.4% – Modern
Ernst Ludwig KIRCHNER (1880-1938) – 0.4% – Modern
Georges BRAQUE (1882-1963) – 0.4% – Modern
Georg BASELITZ (b. 1938) – 0.4% – Post-War
Pierre SOULAGES (b. 1919) – 0.4% – Modern
Juan GRIS (1887-1927) – 0.4% – Modern
Salvador DALI (1904-1989) – 0.4% – Modern
Edvard MUNCH (1863-1944) – 0.4% – Modern
Paul SIGNAC (1863-1935) – 0.4% – Modern
DONG Qichang (1555-1636) – 0.4% – Old Master
Fernando BOTERO (b. 1932) – 0.4% – Post-War
WEN Zhengming (1470-1559) – 0.4% – Old Master
George CONDO (b. 1957) – 0.4% – Contemporary
Sam FRANCIS (1923-1994) – 0.4% – Post-War
Alighiero BOETTI (1940-1994) – 0.4% – Post-War
Bernard BUFFET (1928-1999) – 0.4% – Post-War
Max ERNST (1891-1976) – 0.4% – Modern
Robert RAUSCHENBERG (1925-2008) – 0.4% – Post-War
CHEN Yifei (1946-2005) – 0.3% – Contemporary
Maurice DE VLAMINCK (1876-1958) – 0.3% – Modern
Barbara HEPWORTH (1903-1975) – 0.3% – Modern
Pierre BONNARD (1867-1947) – 0.3% – Modern
Donald JUDD (1928-1994) – 0.3% – Post-War
Max BECKMANN (1884-1950) – 0.3% – Modern
Tsuguharu FOUJITA (1886-1968) – 0.3% – Modern
Alfred SISLEY (1839-1899) – 0.3% – 19th Century
Laurence Stephen LOWRY (1887-1976) – 0.3% – Modern
Morton Wayne THIEBAUD (b. 1920) – 0.3% – Post-War
Nicolas de STAËL (1914-1955) – 0.3% – Modern
Enrico CASTELLANI (1930-2017) – 0.3% – Post-War
Anselm KIEFER (b. 1945) – 0.3% – Contemporary
Michelangelo PISTOLETTO (b. 1933) – 0.3% – Post-War
GUAN Liang (1900-1986) – 0.3% – Modern
Kees VAN DONGEN (1877-1968) – 0.3% – Modern
Francis PICABIA (1879-1953) – 0.3% – Modern
Piero MANZONI (1933-1963) – 0.3% – Post-War
Tom WESSELMANN (1931-2004) – 0.3% – Post-War
Giorgio MORANDI (1890-1964) – 0.3% – Modern
Günther UECKER (b. 1930) – 0.2% – Post-War
Josef ALBERS (1888-1976) – 0.2% – Modern
Robert MOTHERWELL (1915-1991) – 0.2% – Modern
Rufino TAMAYO (1899-1991) – 0.2% – Modern
Hans ARP (1886-1966) – 0.2% – Modern
Emil NOLDE (1867-1956) – 0.2% – Modern
Paul KLEE (1879-1940) – 0.2% – Modern
Jean-Paul RIOPELLE (1923-2002) – 0.2% – Post-War
Alexej VON JAWLENSKY (1864-1941) – 0.2% – Modern
Albert OEHLEN (b. 1954) – 0.2% – Contemporary
Frank AUERBACH (b. 1931) – 0.2% – Post-War