Fine wine noses in front on assets list

Published on Wednesday 23 December 2009 20:00

FINE wine has proved itself one of the top-performing assets of the Noughties, beating equities, oil, property and fine art, according to research published yesterday.

Figures from Liv-ex, the Fine Wine Exchange, show that in some cases wine has outperfomed other assets by more than 400 per cent as ever-increasing demand and fixed supply has driven demand and value.

A 12-bottle case of 1982 Lafite Rothschild, a top red wine from Bordeaux that has become increasingly popular in China, has increased in price by 857 per cent over the last ten years, from 2,613 to 25,000.

The best-performing equity, British American Tobacco, increased in price 454 per cent over the same period, while gold prices are up 297 per cent.

James Miles, director of Liv-ex, said: "The last ten years has seen the fine wine market transformed. Global turnover has increased from under $1 billion a year to more than $3bn. Furthermore, innovations like the Liv-ex Fine Wine Exchange have helped the market shed some of its secrecy and dramatically increased price transparency, attracting new entrants.

"The noughties have also seen fine wine move from being a niche investment into one that is considered increasingly mainstream by the investment community. As this research shows, fine wine has a strong track record of delivering more than 10 per cent compound annual growth. Fine wine is also a useful tool for portfolio diversification, showing low volatility and limited correlation with other assets."

Demand for fine wine has been fuelled by Far East investors partly because of the burst in strength of China's renminbi and Japan's yen against sterling. Fine wine, unlike other investments, has seen no negative rolling five-year period in the last two decades, and its display shows low correlation to other investments, especially equities.