Fortis Mutual Funds SCC Ltd. provides investors an opportunity to subscribe to its fine art investment fund dubbed Fortis Fine Art Fund. This fund, which will be the focus of this review, is among the three main funds from the firm.
Fortis Mutual is a private mutual fund business based in St. Vincent and the Grenadines in the Caribbean.
The Fortis Mutual Fine Art Fund seeks to increase investor returns by making investments in fine art, mostly paintings. Nevertheless, the firm’s website doesn’t provide much information about performance, portfolio makeup, or particular investing approach.
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Some facts might change from the time of writing, so potential investors shouldn’t decide to invest or not to invest based on this review alone.
There are considerable difficulties associated with investing in fine art, particularly when using split-ownership arrangements. Speculation is common in the art market, which can be obscure and illiquid.
Of course, there are positives too.
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Fine Art Investing
With a history of more than 30 years, the fine art market has so far outperformed other types of assets when looking at a long-term time frame.
Fine art frequently draws wealthy investors searching for reliable strategies to protect their investment during recessions.
Even during times of economic recession, art sales worldwide have demonstrated durability in recent years, indicating the market’s ongoing strength.
What is Fortis Mutual Fine Art Fund?
The Fund takes advantage of ultra-high-net-worth people’s growing interest in uncommon art by using contemporary securitization techniques.
A group of experts selects the fine art investments for the opportunity.
Investing in fine art can be viewed as a short- to long-term prospect, depending on a few key variables.
Fortis Fine Art Fund vs Other Art Investment Funds
The Fund makes investments in various artistic mediums, such as digital art, alternative art, and traditional fine art. It’s able to capitalize on several art market segments amid its flexible strategy.
Meanwhile, a lot of other art funds focus more on digital and NFT art, which reflects the increasing popularity of tech-based investing strategies.
Although Fortis wants to provide different investments in the fine art market, it might not be as focused on particular markets as some of its rivals.
That being said, certain art funds might be more focused on niche markets like modern art or specific geographical areas.
Pros and Cons of Fortis Mutual Fine Art Fund
Fine Art Fund Investment Benefits
- Art investment funds, including those managed by Fortis, have the potential to deliver substantial returns.
- Just in the last year, Statista pegged worldwide art sales at roughly 65 billion US dollars. Despite the 4% year-over-year drop, market held up well and outperformed 2019 (pre-pandemic).
- You can participate in art investment through funds without having to buy complete pieces of art. Acquiring shares in the fund allows investors to access high-value assets at a lower cost than they would had they owned them directly.
- Investors can diversify their portfolios through art funds. This lets you experience a variety of artists and styles and lowers the danger of investing in just one piece of art.
- Generally speaking, art fund investors have more liquidity than those who own original artwork.
- Given that the value of tangible goods, such as artwork, tends to appreciate with time, art investments can act as an inflation hedge.
Fine Art Fund Investment Risks
- The price of art can vary greatly depending on a number of factors, including shifting collector choices, economic situations, and evolving trends.
- The portfolio of a fund is sensitive to market swings due to the substantial fluctuations in how much an artwork is.
- Investing in art can also be comparatively less liquid than other asset classes. It can take time to market an artwork. It can be difficult to find a buyer who is ready to pay the asking price.
- It could be difficult for Fortis Fine Arts Fund investors to turn their investments into cash if necessary.
- Because origin, artist image, and trends are all important considerations, the value of artworks can be quite arbitrary. It can be difficult to establish a clear and uniform valuation process for the fund’s holdings.
- For fine arts funds, compliance with securities regulators’ strict standards is essential.
- Because the return of the fund is highly reliant on the success of the art market, investors may be exposed to concentration risk by the Fortis Fine Art Fund’s exclusive focus.
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