While equities are in the red, panache and passion still prevail over art as an investment option . Contrary to popular belief, the economic slump that is raging across the world has not really impacted the merit of art as an investible asset class.

The return of Osian Art Fund testifies to the fact that art, though exotic and biased towards affluent investors, is still a gainful option in times of economic stress and investment degeneration. While gold funds and debt funds have logged 12.4% and 10.9% respectively as returns (between July 2006 and January 2009), the Osian Art Fund claims to have yielded 10.5% as returns for its investors.

Some may ask what is the basis of the NAV, how accurate is it? Can it really be a true indication of value as with other assets which have clear daily market determined values with clear liquidity options?

Explained Osian Art Fund advisor Neville Tuli, “Well, obviously, this is a limitation of the nature of the asset, as it is not intended for short term trading. If you compare the value of the indexed value in our NAV for the past 30 months and compare such with the actual realised sale value for those same artworks, you will see the indexed value at Rs 100.29 crore and realised sales value at Rs 102.67 crore, for a total of 619 art works sold from the inception of the fund. Thus actual sales is 2.37% higher than the indexed values."

According to art advisors, post the deep correction in contemporary art segment in mid-2007, investors (predominantly ultra-high networth individuals - UHNIs) have shown willingness to buy or invest in quality works of both masters and amateur artists. Record price-tags for the paintings of FN Souza, Tyeb Mehta and Subodh Gupta, at Christie's and Sotheby's, are testimonies to the fact that Indian art is gaining foot-hold in international art market, gallery owners opine.

High quality Indian art is increasingly being seen as a credible asset, with many advantages over other assets. The auction sales turnover has taken a great leap from Rs 13.3 million in 1999 to Rs 5,527 millions in 2008, having achieved an annual growth of 51.26%, the Osian note to investors said.