Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 85

Making money while orchestrating great music

Imagine sitting in a darkened concert hall listening to a young virtuoso take her violin through its paces. The brilliant beauty of the violin’s sound is carried right to the back of the room. Her violin is a Stradivarius and incredibly, you own it (or at least, part of it).

Three years ago, the Australian Chamber Orchestra launched the ACO Instrument Fund (the Fund). Thanks to the generosity of supporters like the Commonwealth Bank and Peter Weiss AO, the Orchestra already had access to rare and beautiful instruments. But there was a feeling within the ACO community that more could be done to secure fine instruments for its players.

Rather than turn to donors to subscribe to a new fund-raising campaign, the ACO began to explore options for the development of a fund structured as a unit trust backed by fine instruments. The ACO Instrument Fund is now recognised as an innovative impact investing opportunity which offers both a financial and a social return.

Existing investors range from hard-nosed financiers to committed philanthropists looking for opportunities to enhance the Australian cultural landscape. We are especially pleased to have created a financial product which increases the pool of opportunities for people interested in social impact investing.

Details of the Fund

The ACO Instrument Fund was launched in July 2011 as an unregistered Australian unit trust with its own Board of Directors chaired by veteran Macquarie Bank financier, Bill Best. JBWere Limited is the Fund’s Australian Financial Services Licence holder.

The Fund’s investment objective is to achieve long-term capital gains for investors through buying high-quality stringed instruments. These are loaned without charge to musicians from the Orchestra for use in concerts, recordings and rehearsals in Australia and on the ACO’s international tours.

The Fund is available to wholesale investors only and requires a minimum investment of $50,000. Unlike other unit trusts, there are no ongoing fees and commissions, and the ACO meets the cost of all general and administrative expenses.

The Fund offers limited withdrawal opportunities every three years. The ACO is required to hold a minimum of $250,000 or 10% of the value of the Fund in its reserves, whichever is higher, up to a maximum of $500,000 to pay for redemptions.

The Fund will be terminated in 2021 on its tenth anniversary unless 51% of unit holders vote to continue it (the ACO is not permitted to vote its units).

Assets of the Fund

The Fund’s first acquisition was a 1728/29 Stradivarius violin, believed to be Australia’s only Stradivarius violin, bought by the Fund in 2011 for $1.79 million and revalued this year at $2.95 million. Its latest acquisition is a 1714 Joseph Guarneri filius Andreae violin, bought by the Fund in early 2014 for $1.65 million and revalued just a few months later at $1.71 million. Both these violins were made nearly 300 years ago in Cremona, a small town in northern Italy, where the Guarneri and Stradivari families competed to build the finest instruments.

The increase in value of each of the violins is in line with research carried out by the ACO prior to setting up the Fund. During this time, the ACO reviewed sales data from reference resources such as Tarisio/Cozio and examined academic studies. It also consulted widely with respected dealers including Simon Morris from J & A Beare and Peter Biddulph, a distinguished London- based expert. The ACO’s research suggested annual returns of around 6-8% for public sales and 8-10% for private sales had been achieved in the past, with even higher returns achieved for violins from luthiers like Stradivarius and Guarneri del Gesu. As an asset class, fine instruments also typically show lower price volatility and display a low correlation with other financial assets (Graddy and Margolis, Fiddling with Value: Violins as an Investment?).

Financial and social returns

The ACO Instrument Fund was launched with a unit price of $1.00. In May 2014, the Board approved an increase to $1.20 following a revaluation of the underlying assets. The increase from $1.00 to $1.20 implies growth of almost 6.5% per annum for the Fund’s founding investors.

The Fund’s social return is equally significant. Satu Vänskä, Principal Violin and custodian of the Stradivarius says, “I will never forget the feeling when I was handed this instrument to play for the first time … a Stradivarius, the epitome of fine violins … it has a soul and personality of its own. For the violinist, this means that the violin seems to play the player.” Not only do individual musicians benefit from having access to fine instruments, the Fund acts as a powerful recruiting tool which allows the ACO to attract and retain world-class musicians.

Audiences, both in Australia and internationally, in turn benefit from the opportunity to hear music played to an exceptionally high standard. These audiences range from the ACO’s 10,000 subscribers to underprivileged children in the ACO’s educational outreach programmes, to audiences on concert hall stages in London, Vienna and New York.

Finally, there are the social benefits accruing to the investors themselves. These include making a direct contribution to the wellbeing of society, and the deep sense of connection that comes with owning the rare and beautiful instruments they hear on the stage.

 

Pennie Loane is Investor Relations Manager for the Australian Chamber Orchestra’s Instrument Fund. For more details, see www.aco.com.au. This article is for general education purposes only and is not personal financial advice nor an investment recommendation. As with any fund, asset values can rise or fall, and potential investors should read the relevant offer documents and seek professional advice.

 

  •   24 October 2014
  • 1
  •      
  •   
banner

Most viewed in recent weeks

Are you making these SMSF mistakes?

After four decades advising investors, there are a few common mistakes I've seen SMSF investors make. From holding too much cash and chasing yield to overtrading and trusting tips. Are these errors costing you?

Why have Australian living standards 'fallen' and how do we fix it?

For the last few years there has been much talk of a 'cost-of-living' crisis in Australia and of 'falling living standards'. Lately this has flared up again with the pickup in inflation resulting in a renewed fall in real wages.

Will you run out of money in retirement?

Fear of running out has become a defining retirement anxiety. Why do some retirees die with substantial wealth while others deplete their nest egg? Evidence suggests the answer is more complicated than we think. 

Four options for an income investor’s next dollar

What if Australia’s golden age of dividends is ending? Rather than overhaul your portfolio, it may be worth considering where new capital can work harder. I discuss four income strategies and the trade-offs behind each.

Retirement spending is not one-size-fits-all

New data challenges the idea that Australians are underspending their super. The bigger issue may be helping retirees navigate complexity, make confident decisions and use their savings to support security, wellbeing and choice.

The missing link in the CGT debate

A little-noticed consequence of Labor’s tax changes could have implications well beyond investors’ tax bills. The issue raises bigger questions about incentives, capital allocation and the drivers of long-term economic growth.

Latest Updates

SMSF strategies

Meg on SMSFs: What do we think about reversionary pensions these days?

Reversionary pensions have long been a staple of SMSF estate planning, but are they still the best option? Meg Heffron revisits a once-clear favourite and asks whether changing super rules have shifted the balance.

The ageing ‘crisis’ has not and will not happen

Rising age dependency is frequently treated as a warning sign for economies. But when actual workforce participation is examined, a strikingly different picture emerges about ageing, productivity and economic sustainability.

Retirement

How does the 4% rule stack up?

The 4% rule has long been retirement's gold standard. But after a difficult period for investors, fresh analysis suggests a more conservative approach may significantly improve the chances of making savings last.

Shares

Four charts that expose market concentration risk

Investors have recently been rewarded for backing market leaders, but history suggests this eventually comes at a cost. Now may be the time to review whether your portfolio is carrying unintended risks beneath the surface.

Investment strategies

The case for gearing beyond property

Most Australians gear into property but ignore shares. That may be a mistake. Used carefully, geared equity strategies can enhance long-term returns, reduce cash tied up in growth assets and support retirement income goals.

Economy

Australia's $1 trillion debt pile

The headlines exclaiming that Australian government debt has hit A$1 trillion and US government debt has hit $40 trillion has turned heads, but how serious are they really? Will Australia's mix of debt create challenges?

Economy

Has 100 years of growth made us any happier?

For decades, GDP has been the benchmark for economic success, but has it made us materially happier? If happiness does not rise in lockstep with prosperity, are we overlooking what constitutes a successful society?

Sponsors

Alliances

  • ASA-Logo-RGB-ActiveGreen-web.png

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.