Fine wine outperforms investing in art and cars, report claims

9th February, 2017 by Arabella Mileham

Fine wine is the “best-performing” investment compared to art, antiques, and cars, a new report by fine wine investment management company Vin-X has claimed.

The company compared the indices of ‘treasure assets’ – collectible luxury items bought as investments by the super-rich, such as wine, jewellery, vintage watches, classic cars, rare stamps and fine art – since 1994 to gauge wine’s performance among other luxury items collected by investors.

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Vin-X’s head of procurement Martin Pruszynski, who wrote the report, said that previous research showed wine “consistently” outperforms traditional investment assets like equities, gold and property, but the new report highlighted its strong performance against other highly collectible items.

“Wine significantly and consistently outperformed its competitors, showing as the top performer on half of the measurements we examined, and never outside of the top three. The inescapable conclusion is that wine is the best performing of all alternative assets,” he said in the report.

“In terms of performance, ease of access, ownership costs and transaction costs, no other ‘treasure asset’ came close to matching fine wines.”

The research, which use the Liv-ex Investables index for wine, found that in a five year average hold, wine saw a 99.72% increase, ahead of cars (52.62%) and art (55.05%), rising 235% over a ten year period, compared to 142.38% for cars and 131.49% for art. It was “nearly double the next best performing  asset, and on any measure almost triple the capital growth return from the FTSE100,” the report said.

Speaking to db Pruszynski added it was both the rarity value of fine wine, which each vintage’s availability diminishing over time, had helped boost its performance and that the internet and technological innovation had transformed trading and investment in fine wine.

Vin-X’s CEO Peter Shakeshaft credited this increasing transparency of the fine wine market, and in particular the role of Live-ex in firming up “almost on a daily basis” the ability to two-way trade to as an important factor in wine’s growing popularity as an asset. He argued that fine wine fared well compared to traditional investments such as fine art, which, although it performed well, had a “big cost buy-in and a dubious exit route”.

“Most people who buy treasure assets want to be able to exit too, in the case of a big event. That is very significant and will get stronger,” he said.

Pruszynski also noted that the fine wine market appeared to be broadening, as new investors joined it. He argued that interest was coming from more diverse areas, pointing to research via Google Trends Data that showed where searches for wine such as Château Lafite Rothschild came from.

“You would expect Hong Kong, France and Switzerland to be high on the list, but what surprised me was that Malaysia was the fifth most popular location globally to be searching for Lafitte Rothschild, and Mexico was also on the list. It points to where we’re getting emerging wealth and more buyers for this market,” he said. “A broader based market is certainly a good thing for investors.”

“The increase we’ve seen in the last seven years is palpable and will carry on as more and more people become comfortable [buying wine as an investment],” Shakeshaft added.

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