Wealthy investors looking to diversify beyond stocks and bonds are now turning to an unusual money-making vehicle -- the art investment fund.

The name says it all: These funds invest in fine art and seek returns by acquiring and selling high-end pieces for profit.

Growth in art investing has helped smash records for international art sales, which hit $66 billion last year. And the idea has been catching on with the very rich -- a group that already uses collectors' items and luxury goods as investments -- in the years following the global financial crisis.

"People are looking at new areas to invest in, and at the moment art is one of those -- it's making people money," said Jon Reade, co-founder of Hong Kong-based art brokerage Art Futures Group.

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As with stocks, fund managers might buy pieces they believe are currently undervalued, perhaps from emerging artists. Funds can also buy into "blue-chip" artists -- similar to blue-chip stocks, these are top artists whose coveted works may offer more reliable returns.

Some art investment funds focus on investing in art from a certain region, a particular style period, or a specific medium, such as photography.

Another strategy is to buy in bulk, from a gallery or artist nearing bankruptcy, or to arrange for pieces to be exhibited -- a move that can help increase value.

Fund managers try to predict when a certain work will peak in value -- the golden moment to sell for a profit. To accomplish this, managers track a variety of indicators from auction houses, curators and galleries that can illuminate otherwise murky trends.

These funds can carry a hefty price tag -- London's Fine Art Fund Group requires a minimum investment of $500,000 to $1 million per investor.

"It's a very significant threshold, so it's not a fund for widows, orphans or retail investors," said CEO Philip Hoffman. "It's purely for high net worth and institutional type investors."

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Art funds are relatively new, and hold total assets of roughly $2 billion worldwide, according to the Art Fund Association, an industry group. That's still tiny compared to the $2.6 trillion hedge fund industry.

But related businesses are already springing up to support investing in art, such as freeports -- highly secure, tax-free places to stash fine art and other luxury items.

Future demand for art funds is expected to come from Asia, and especially China. Chinese demand boosted the global art fund market by 69% in 2012 alone, according to a Deloitte report.

Art investing is attractive to the Chinese due to limited investment options in the country. Plus, it promises big gains -- China's contemporary art market has gained roughly 15% each year in the last decade, while stocks have been largely flat, said New York University professor Jianping Mei, the developer of a fine art index.

Critics say a lack of regulation and the opaque nature of the market make art one of the riskiest investment options out there. Some have even accused wealth managers of exploiting the lack of transparency to bid up certain artists or works in order to raise the value of their funds.

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And art is not as liquid an investment as assets such as stocks or bonds. Investors should expect to hold pieces for years, and be prepared to absorb insurance and storage costs during that time.

But supporters say these characteristics make art an extraordinary and rewarding investment.

"You get the benefit of a beautiful work of art you can enjoy on your wall," said Diana Wierbicki, who specializes in art law at Withers. "It's also an asset that is appreciating in value, because it's a market that's so strong."