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The implications of art fund collections shown in museums

Art funds are investment vehicles, the return on which is linked to a portfolio of works of art acquired—as opposed to the stocks, bonds, property and commodities that are the usual components of investment funds. The return to the investor is determined, on the one hand, by the buoyancy of the art market or, more specifically, the bit of it in which the fund is investing (for example, contemporary, Asian or decorative arts) and, on the other hand, by the shrewdness of the decisions made by the funds’ managers with respect to specific acquisitions. The more buoyant the art market, the less shrewd the fund managers need to be to beat other financial instruments with which they are competing for investors’ attention and money.

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