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 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 4% uplift for UK Equities and 9% for real estate.
The global fine wine and spirits market is valued at £60bn annually with an expected annual growth rate 0f 4-6% over the next 5 years.
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 50,000 people will see their wealth rise to 30M (USD) or more’. In 2019, the number of millionaires (in US$ terms) has exceeded 20 million people for the first time. Asia, which is one of the most important regions for fine wine consumption and collection, is set to outperform all other regions in terms of the rise of the super-rich. This should have a positive impact on wine performance.
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 4.1 percentage points (November 2019).