Reports show that investing in fine wine is a more stable bet than buying gold, making it one of the most sought-after asset classes. The Liv-ex summary of the 2018 fine wine investment market says it is “a record-breaking year.”
The research shows that most of the top 100 investment wines revolve around Bordeaux, which has been “steady, consolidating after two years of strong gains”. Burgundy comes out the most impressive performer.
Fine wine investment index
The Fine Wine 1000 index by Liv-ex is described as “the broadest measure of the fine wine market”. Over the year, the index increased by 10.2% and Burgundy is responsible for a lot of the growth, rising by 35.5%.
The ten most impressive price rises were all Burgundy. This shows that demand for the highest end wines in this region is high and is likely to continue to increase prices over the next year.
Record-breaking wines in 2018 include two bottles of Romanee Conti 1945 that sold for just over £443,000 and £394,000 respectively. And while these grabbed media headlines, the wider market for Burgundy has been quietly growing. Collectors are buying more into estates including Roumier, Leflaive, Leroy and Rousseau.
Widening interest from investors
As well as the strong interest in Burgundy, the research also shows a clear trend for investors to widen their interest. Many are now looking past Burgundy and Bordeaux to other regions including the Rhone, California and Champagne. Wines from these regions are making impressive gains, but from smaller base levels than Burgundy.
Leaving aside the Live-ex 1000, the more exclusive index (Liv-ex 100) concentrates on only the most expensive wines. This increased in value by 0.22% within a narrow range of 2%, making it “more stable than gold” over the course of this year. This Is partly because the index is in Sterling, and there has been a somewhat stable pound against the Euro over the year.
For 2019, the index says that the fine wine market is “in good health, offering steady returns and low volatility compared with other mainstream assets”. The summary also mentions the doubts cast over the industry due to the uncertainty surrounding Brexit, saying: “The outcome of Brexit negotiations will likely affect the price of fine wine because currency volatility influences the levels of interest from non-Sterling buyers. However, this might be less of an issue for regions with high demand and relative scarcity such as Burgundy and Piedmont.”