3 Alternatives to Investing in Art on the Stock Market?

The short answer to this question is “No”. But… Luckily, while there isn’t any art on the stock market, there are a few art funds that have surfaced over the last 5 years that can provide a very similar experience.

Art on the Stock Market
Masterworks CEO Scott Lynn on NYSE FloorTalk

Art on the Stock Market

Art funds are the closest alternative in this day and age to investing in art on a stock exchange. Currently, two prominent art funds are from Yieldstreet and Masterworks.

Yieldstreet’s Art Equity Fund IV, for instance, is a diversified fund comprised of artworks by Blue Chip artists like Jean-Michel Basquiat, Damien Hirst, Edward Ruscha, and Lucio Fontana, among others. Similar to an ETF, Yieldstreet actively monitors the artworks’ performance and adjusts the fund accordingly (buying or selling artwork) with the aim to minimize risk and maximize returns for investors.

Screenshot taken from yieldstreet.com

On the other hand, Masterworks allows you to invest in individual artworks rather than a bundle package like Yieldstreet. However, you can easily simulate an art ETF by investing across the numerous artworks on offer. While this approach may require more management on your behalf, it also offers you the freedom to choose the exact artists and artworks to receive your investment dollars.

Screenshot taken from masterworks.com

Masterworks is probably the closest experience you will get to investing in art on the stock market because they have overcome the liquidity issue of art investing by developing a secondary market for your shares. This means you can buy and sell shares to other Masterworks members at any point in time (without the fees you might get on a traditional stock exchange). This is the primary reason Masterworks is my preferred option at the moment.

Screenshot taken from masterworks.com

Pubic is a third investing platform that can simulate an art ETF. However, they have a very small selection of art to invest in. What they do offer, above Yieldstreet and Masterworks, is access to a bunch of other cultural assets like trading cards and sneakers, which is very cool if you want to diversify into these assets at the same time.

Screenshot taken from public.com

However, be warned these art ETF substitutes have limitations. For one, they are at least one step removed from living with an art collection, which means they may not satisfy everyone’s expectations, especially if you seek a pure art collecting experience. Instead, they are better suited for those who prefer a hands-off approach or those that want to own the best of the best without having to fork out millions of dollars.

To determine your preference, consider the following questions:

  • Do you want to own an affordable artwork that you can have in your home and sell at your discretion?
  • Or would you rather hold a fractional share of a more expensive artwork that you cannot live with?

There are no wrong answers here, but reflecting on these questions will help guide you to buying affordable editions from established artists or exploring art-on-the-stock-market substitutes.

Check out Masterworks, Public, and Yieldstreet and explore Art Funds that let you purchase shares in million-dollar paintings from blue chip artists like Banksy, Kaws, and Yayoi Kusama.

Read more: Review: Masterworks vs. Yieldstreet
Read more: Review: Masterworks vs Public

We welcome you to Contact Us with any questions you have about investing in art. Let us know your budget, the kinds of art that interest you, and we can work out a plan to get you started with art collecting the right way.