A fund investing in the works of Banksy and Damien Hirst is the sort of thing you might expect to be launched at the height of a bull market, but Castlestone Management has chosen the depths of the current bear market to debut its Collection of Modern Art fund.

rtx79maThe fund, an 8-year investment vehicle with a minimum investment of $10,000 or 10,000 pounds, will buy up art in genres such as impressionist, post-war, contemporary, sculpture, urban art and photography, while its managers will be supported by experts from auction houses, dealers and artists.

Castlestone points to diversification, a lack of correlation with stocks and bonds, and research from Mei and Moses showing strong performance from art since 1875.

The firm backs up its investment case with rather more unusual examples than normally appear in investment literature, such as French financier Andre Level who in 1904 apparently persuaded 12 other investors to contribute 212 francs to a fund called La Peau De L'Ours (The Skin of the Bear), which bought up modern art. Selling the collection in 1914 (which probably proved good timing), he made an annualised return of 14.8 percent.

Any other reasons as to why people should put their money into modern art? Again, another I rarely see in fund literature.