BAA Looks at London October Sales

Beautiful Asset Advisors/Mei Moses art indexes have just released their newest market insights report to include the results of the London October post war and contemporary sales.

According to the analysis, the evening sales were strong and have the index outperforming equities.  The average compound annual return of 8.5% was revealed, when compared to a 5.6% return (over the same holding period) for equities.

BAA reports

The four October evening post war and Italian sales have been reported in the press as having good results. There were about 191 lots put up for sale and 156 sold yielding an above average success rate of almost 82%. We had prior purchase price data on 46 of those lots and 35 sold yielding a success rate of 76%. From a financial returns perspective of the holders of the art that sold the results were similar at both auction houses. The average of the compound annual returns (CAR) of the 35 lots that sold was a strong 11.6% with an average holding period of 9.5 years. These strong returns easily beat the returns that would have been achieved if the art purchasers had been invested instead in the S&P 500 Total Return index (where dividends are reinvested tax free) for the identical holding periods as the art. The average CAR for the S&P investments would have been only 6.1%.

The day sales for each auction house produced very similar results. From a financial returns perspective of the holders of the art that sold the results were within a percentage point of each other. However the mean CAR for the day sales was well below the overall mean return of our entire repeat sale database for this collecting category. The average CAR for the 27 day pairs was 4.6% with an average holding period of 8.7 years. The average CAR for investment in the S&P 500 TR index for the same holding periods as the 27 day art pairs was a similar 4.9%.

Source: Mei Moses/Beautiful Asset Advisors