Cru Wine Investment performance vs. other investment classes
Sources: Liv-Ex, Bloomberg, MSCI
Fine wine investment is a capital gain investment. The underlying asset (fine wine) increases in value throughout time as the underlying asset becomes more rare and valuable throughout time (consumption means its supply decreases, and as a wine matures the better its quality becomes).
It is a rare commodity with attractive supply and demand characteristics. Supply is relatively fixed as the Châteaux have a limit on their possibility to produce fine wine while demand continues to grow strongly. This industry is fundamentally ruled by the economics of supply and demand.
Fine wine investment is an alternative tangible investment with a historical growth of 10% per annum. It lies within the category of tangible alternative investments such as gold investment, vintage cars, art, rare coins and stamps.
It is considered more attractive than most tangible alternative investments as it has an accurate valuation offered by the leading trading platform liv-ex (www.liv-ex.com) and offers liquidity with daily bid/offers in the range of £20m.
The global fine wine market is valued at £2.5bn annually. In terms of the focus of that value, it is primarily on the top 25 châteaux in Bordeaux and the predominance of value sits with the five First Growths plus Super Seconds and premier Right Bank wines, which are thought to generate as much as 75% of the secondary market trading in fine wine.
Fine wine historical performance over the medium to long term has been outstanding when compared to many traditional and alternative asset classes.
Since our trading start, Cru Wine Investment has outperformed the leading fine wine market index by 5 percentage points (Feb 2016).