Fine wine performance over the last 10 years vs. other asset classes
Sources: Liv-Ex, Bloomberg, MSCI
Cru Wine Investment performance vs. other investment classes
Fine Wine’s performance over the medium to long term has been outstanding when compared to many traditional and alternative asset classes. Historical growth of 11% per annum compares favourably against an 8% uplift for UK Equities (including re-investment of dividends) and 4-5% for Gold and Oil over the same period (30 years).
The global fine wine market is valued at £5bn annually. The focus of that value 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 70% of the secondary market trading. It lies within what Coutts have coined the ‘passion index’ and continues to be the most dependable performer year-on-year.
Fine Wine as the underlying asset becomes rarer and more valuable over time (consumption means its supply decreases, and as a wine matures and develops in the bottle it becomes more desirable).
A rare commodity with unique supply and demand characteristics – Supply is near to fixed as the Châteaux have a legal cap on their capacity to produce. Demand continues to rise as the number of HNW & UHNW increases. According to the Knight Frank Wealth Report 19 ‘Over the next five years an additional 42,711 people will see their wealth rise to 30M (USD) or more’.
With the specific wine asset information now available from issue price, critic quality scores, ongoing transaction/pricing data together with news from the producers, the market has evolved considerably. The leading trading platform Liv-Ex offers liquidity with daily bid/offers surpassing the £30m mark.
Since we started trading, Cru Wine has outperformed the leading fine wine market index by 4.3 percentage points (Apr 2019).