Investing in Art: Seizing Opportunities in a Changing Market
Investing in Art: Seizing Opportunities in a Changing Market
Amid a cooling global art market, new innovative tools have emerged to assist investors looking for historical buying opportunities. The Cheung Kong Graduate School of Business (CKGSB) and SDA Bocconi School of Management have collaborated to develop the MM Art Indices, a pioneering suite of indices designed to track global art market performance and deliver a thorough analysis comparable to institutional standards.
Understanding the MM Art Indices
The MM Art Indices are an extension of CKGSB's previous success with the MM Chinese Art Indices, launched back in 2023. These new indices, including the MM Continental Art Price Indices, are unique as they provide the first-ever comparative long-term art price benchmarks classified by artists' birthplaces, covering regions such as Asia-Africa-Oceania, Europe, and the Americas.
Key Findings from the Indices
According to data collected from auction records dating back to 1873 from prominent auction houses, the Asia-Africa-Oceania region demonstrated the strongest long-term growth with a compound annual growth rate (CAGR) of 7.7%. Despite a decline of 6.4% noted in Spring 2025, this position highlights resilience amid market fluctuations. Conversely, the Americas experienced a notable rebound with a spike of 31.7%, while Europe rose by 22.4%, almost recovering its pandemic-era losses. However, long-term growth in Europe is more modest, sitting at a CAGR of only 2.3%.
Economic Shifts Affecting Regional Art Markets
As explained by Mei Jianping, a CKGSB Professor of Finance, these regional patterns reflect significant underlying economic shifts. The European art market displays maturity and stability, while the Americas experience expansion and volatility reminiscent of postwar periods. The rapid, albeit uneven, growth in Asia is largely driven by the emerging art markets of China and India. For instance, despite a remarkable decline from its peak in 2020, the Chinese art market showed a notable recovery of 9% in Spring 2025.
The Historical Context of Art Investment
By integrating data from historical indices such as the Sotheby's Mei & Moses Index (covering 1928 to 2000) with the newly developed MM Art Indices, researchers have observed that the 10-year rolling returns on art turned negative during 2023-2024, marking the worst period for art investment in the last 70 years. Mei highlights that these extraordinary market conditions suggest that art could be undervalued relative to historical standards. For long-term collectors, this potentially offers a strategic entry point into the art market.
Future Collaborations and Developments
CKGSB and SDA Bocconi have signed a memorandum of understanding to co-develop new analytical tools, including country-level indices for Europe and sentiment metrics through the Art Market and Finance Monitor at SDA Bocconi. As emphasized by Professor Brunella Bruno from SDA Bocconi, the MM Art Indices provide essential transparency to a market that has historically lacked standardized benchmarks. By employing rigorous financial methodologies, they aim to close the gap between cultural value and market performance.
Frequently Asked Questions
What are the MM Art Indices?
The MM Art Indices are a new suite of indices launched by CKGSB and SDA Bocconi to track global art market performance, providing institutional-level analysis.
Why is the current art market considered a buying opportunity?
The current market conditions suggest that art may be undervalued historically, making it an advantageous time for long-term collectors to enter the market.
How do regional performances vary in the art market?
Regions like Asia-Africa-Oceania have shown stronger growth compared to Europe, which remains stable, while the Americas exhibit volatility yet significant recovery.
What role do the MM Continental Art Price Indices play?
They serve as the first comparative benchmarks for art prices based on artists' birthplaces across major global regions.
How can new analytical tools benefit art investors?
New tools developed through collaboration will offer detailed insights into market trends and sentiment, enhancing transparency and decision-making for investors.
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