Fine wine investment ‘outperforms art, classic cars and antiques’
Investment in fine wine “significantly and consistently outperforms” investment in art, antiques, and cars, a new report by fine wine investment management company Vin-X suggests.
The firm compared the performance of wine with other alternative or ‘treasure’ assets that occupy a similar space in the minds of investors – highly collectable luxury items such as fine art, classic cars, antiques and rare stamps, acquired by the super-rich.
“Performance data alone shows that any investor should at least be considering wine for their portfolio,” said Martin Pruszynski, head of procurement at Vin-X.
The firm found that in a five-year average hold, wine enjoyed a massive 99.72 per cent increase, some way ahead of cars (52.62 per cent), art (55.05 per cent), antiques (33.43 per cent), watches (36.34 per cent), stamps (38.23 per cent) and the FTSE 100 (36.08 per cent).
Vin-X said treasure assets are increasingly being seen as good investments with which to strengthen portfolio performance. Research from investment house Knight Frank shows investment in assets like classic cars, fine wine and antiques represent an average of 10 per cent of the value of investment portfolios of ultra high-net-worth individuals.
In the fine wine market, investment-level wines are primarily to be found in the top 25 Bordeaux chateaux as well as some producers in Burgundy, the Rhone, Champagne, Tuscany, Spain, California and Australia.
It’s a market estimated to be worth £2.5 billion and is particularly popular with consumers in Europe, the US, China and Asia.
Vin-X said fine wine has an advantage over other alternative investments because costs associated with keeping it can be lower and transactions times can be quicker. For example: to keep its value a classic car would need to be stored and maintained – this could cost £5,000 to £6,000 a year. Fine wine does not require the same outlay.
It is also a cheaper investment market to enter, Vin-x said. “Investors will struggle to buy a truly investable piece of art or a similar status classic car for under £100,000,” Pruszynski said. “That same £100,000 would in January 2016 have bought you almost 80 cases of Pontet Canet 2010, a wine that rose nearly 40 per cent across the year.”
“In terms of performance, ease of access, ownership costs and transaction costs, no other treasure asset class comes close to matching fine wine,” he added.
“That fine wine also significantly eclipses the performance shown by other mainstream assets strongly makes the case to investors to includes this exceptional alternative investment in their portfolios.”