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仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

Please be advised that future verbal and written communications from the bank may be in English only. These communications may include, but are not limited to, account agreements, statements and disclosures, changes in terms or fees; or any servicing of your account.

Por favor, tenga en cuenta que es posible que las comunicaciones futuras del banco, ya sean verbales o escritas, sean únicamente en inglés. Estas comunicaciones podrían incluir, entre otras, contratos de cuentas, estados de cuenta y divulgaciones, así como cambios en términos o cargos o cualquier tipo de servicio para su cuenta.

Informamos que as futuras comunicações do banco, verbais e escritas, podem estar disponíveis apenas em inglês. Essas comunicações podem incluir, entre outras, acordos de conta, extratos de conta e divulgações, alterações aos termos ou tarifas, ou qualquer tipo de serviço pertinente à sua conta.

仅此通知,本行即日起发出的口头及书面通信可能将只提供英文版本。这些通信可能包括但不限于账户协议,账单和通知,条款或费用变更;或任何为您账户提供的服务。

There’s more to art than meets the eye

Perspectives

There’s more to art than meets the eye

Steven Wieting

By Steven Wieting

Chief Investment Strategist and Chief Economist

November 5, 2015Posted InWealth Advisory

What does art mean to you? Traditionally, it has represented aesthetic enjoyment and a passion for collecting. Increasingly, though, art is winning appreciation for its investment characteristics as well as its visual appeal. And, while beauty may be in the eye of the beholder, the financial aspects of art can be assessed rather more objectively.

So, how has art performed as an investment over time? According to an index compiled by Mei and Moses, two art researchers, the inflation-adjusted US dollar return for art was an annualized 2.4% in the past forty years. That’s less than the 7.5% return on developed market equities and also below US 10-year Treasury Notes (3.2%). But it’s above the returns on gold (1.8%) and on cash (1.1%).

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Besides its return potential, art can also help to diversify risk in a portfolio. Its annual return correlation to US equities is a low 11% in a 40-year sample period and 16% in an 88-year sample period. This is lower than the 33% correlation between returns on US equities and investment-grade credit markets.

Still, art has suffered negative returns during key episodes where equities and other risky assets fell. In 2009, for example, it dropped 22% and it declined by as much as 63% during the worst of the Great Depression in 1929-32. So, despite its low correlation to US equities, art should clearly be classified as a risk asset and should not be confused with a risk-hedge like US Treasuries.

Despite these characteristics, we do not allocate to art as an asset class in the same way that we do with the likes of equities and fixed income. Single pieces of art or even dozens won't necessarily be representative of broad art-market returns. However, for clients who collect art – or who want to – we can analyze their holdings and recommend asset allocations that reflect the potential risks and returns of their art. And our Art Advisory & Finance business has been helping our clients build their collections for more than thirty-five years.

There's more to art than meets the eye

You can read more of Citi’s insights into the global art market in this GPS report.