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The Fine Wine Market is Seeing More & More Investors

Fine wine bottles in a rack

 

There is no question that appreciation of wine is increasing all over the world which, subsequently, has piqued the interest of potential fine wine investors across the globe.

The fine wine market has established itself as a low-risk marketplace for anyone looking to get into the investment world or wanting to expand their existing portfolio. But why is it so popular?

In this article, discover why more and more people are investing in fine wine and, if you’re considering becoming a fine wine investor yourself, find out how to get started.

Differences between fine wine and other investment methods

 

An alternative investment

An alternative investment is any way of growing your capital that doesn’t fit into the traditional categories, such as equity and bonds.

Alternative investments, such as fine wines, allow investors to diversify their investment portfolios. Doing so decreases the risk over their entire portfolio, giving them the chance to strengthen what they already have.

Low correlation with the stock market

The fine wine market doesn’t correlate with the stock markets because its value relies on the good old-fashioned supply and demand model.

Investment-grade wine producers only make a small amount of wine every year, this already increases its value. As soon as someone drinks that bottle of wine, there is one less bottle to buy, but the demand for that wine doesn’t go away.

This continuous cycle is what often gives fine wine investors such a healthy return on investment, unlike traditional investment methods where prices often rise and fall unexpectedly.

It’s a tangible asset

A tangible asset means it is a physical object. A fine wine investor invests in a real-life, physical product, which means they have direct ownership of that wine and can crack open and enjoy it should they wish to.

This differs to stocks and shares, where although you may receive paper confirmation, you don’t truly own the product – making it less secure than tangible assets.

Low volatility

Volatility is a term to describe the rate prices of an item increase and decrease in a market over a period of time.

Traditional investment methods, like stocks and bonds, have very high volatility. Prices can increase and decrease for any reason at any given time. Indeed, sometimes it only takes one prominent and influential figure to publicly criticise it for its price to dramatically drop.

The fine wine market has low volatility with stable price growth over time, which is why fine wine is considered a low-risk investment.

So, how can you turn fine wine into profit?

One of the many great things about fine wine investment is that you can take it up whether you are an investment expert, or a hobbyist looking to expand your portfolio.

If you are new to fine wine investment and would like some help deciding where to invest your money, you could look into working with a fine wine investment company like WineCap.

Here at WineCap, we offer expert, unbiased advice on strategic investment opportunities and can walk you through how to get the most out of your investment.

We also store your fine wine in government bonded warehouses, ensuring your wines are stored in optimum conditions.

Learn more about wine investment and schedule a free consultation today.

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Investing in Wine Vs. Investing in Stocks – Which is Safer?

Screen showing the stock market figures

If you’re looking for viable investment opportunities then you’ve likely considered a range of potential investments, including stocks and wine. But of these two drastically different investment arenas, which is the safer option during the current economic climate?

In this article, discover the pros and cons of investing in wine and investing in stocks to help you make a more informed decision about which investment direction is best suited to you.

The pros of investing in wine

 

A low-risk investment

Fine wine is a physical asset, so it represents a very low-risk investment. When you invest in the market, your wines are stored in optimal conditions within a secure bonded warehouse.

Wine is a physical, tangible asset

Wine, unlike stocks, is a tangible asset created to be drunk and enjoyed. This gives it intrinsic value as a medium to long-term investment.

A relatively resilient marketplace  

According to S&P Global, wine is one of the few luxury assets to have withstood the harsh impact on assets triggered by the coronavirus pandemic, proving the market relatively resilient. Indeed, wine is widely considered to be a ‘safe haven asset’.

The cons of investing in wine

 

Portfolio valuation can be tricky

Traders tend to purchase and sell wine at a less frequent rate than stocks are purchased and sold, and there is no standardised international market. These factors can make it challenging for wine investors to get an accurate idea of the value behind the wines in their portfolio.

Selecting well-known wines could be disadvantageous

Many wine investors tend to choose mainstream wines from well-known wine regions such as California, Burgundy, or Bordeaux. Owing to their ubiquity, these wines can have a reduced chance of transitioning to rare wine status.

Selling wine can take a while

It can take wine investors some time to sell a bottle of wine in their portfolio, particularly when trying to navigate the marketplace without expert support. This can make it more difficult to access funds quickly should the need arise.

The pros of investing in stocks

 

The potential for large cash gains

Though the prices of individual stocks rise and fall daily, the potential to grow your money over time can be significant. Investing in stable companies that have the ability and intention to grow can often result in profit for investors.

Quick purchases and sales

Thanks to their liquidity, stocks can usually be bought and sold fairly quickly, and often at a fair price.

Diversification

The stock market gives investors the ability to build a diverse stock portfolio across a wide variety of different industries and sectors. This diversity can help to reduce the overall risk of stock investment.

The cons of investing in stocks

 

An erratic, volatile marketplace

Unlike the fine wine market, the stock market is a high-risk, erratic and volatile investment arena. Although stocks can be highly lucrative when invested in tactically and sensibly, the rapid, widespread price fluctuations can make it difficult to achieve the desirable returns on your investments.

Limited company information

It’s important to remember that when you invest in stocks you are investing in a public company. However, investors may not be able to access all relevant information about the company, which can make it more difficult to make good investment decisions.

Capital Gains Tax

If you make a profit on shares you sell, then you will likely have to pay Capital Gains Tax, depending on your total gains for the tax year.

However, it is worth noting that you do not have to pay Capital Gains Tax when you sell fine wine because the HMRC classes it as a ‘wasting asset’.

Wine Vs. stocks – which is the safer investment?

While the stock market represents a high-risk, high reward investment arena, investing in wine tends to offer more security – which is an important consideration if you want to create a sustainable investment portfolio.

Fine wine has a long, proven history of robust returns on investment. According to the world’s largest online wine stock exchange, Liv-ex, fine wine has delivered 13.6% annualized returns over the last 15 years – outperforming most stock markets. One need only review the Liv-ex fine wine indices to see how modest but consistent annual growth adds up over time.

So, in the case of wine vs. stocks, it is our opinion that wine is a much safer investment.

Talk to our wine investment experts

We hope you found this article helpful. If you’d like more information or advice about investing in wine, simply schedule a free 30-minute consultation with one of our wine investment experts.

Schedule your free consultation

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Fine Wine Investment for Beginners

Open road with vineyard beside it

Fine wine investment is increasingly gaining popularity amongst beginners and novices looking to reap the benefits of this alternative asset. Not only is it a proven way to diversify and strengthen an investment portfolio, but also an enjoyable pastime for wine enthusiasts and budding connoisseurs.

Surging prices regularly push fine wine investment into the spotlight, and headlines are filled with stories of investors who bought wine at low prices, then sold it years later for thousands. But how and where do you get started as a beginner? And what are the wine investment returns that you can expect?

The following guide provides an overview of the fine wine investment market and how it works in practice.

How big is the wine investment market?

Investing in wine is no new phenomenon. In fact, it has existed in different forms since antiquity, as wine was circulated and traded throughout the ancient world by Greeks, Egyptians, Phoenicians, and Romans. The writings of Thomas Jefferson provide one of the first pieces of evidence of a premium charged for an older wine. In 1787, he wrote that the 1786 vintage for top Bordeaux wines cost 1800 livres per tonneau compared to 2000 livres for the older 1783. Through the centuries, shrewd wine lovers have been selling part of their collections as a way of subsidising their consumption, leveraging the gains of a uniquely rarifying asset against their own cellars.

Today, the market is transparent and open for beginners as well as experienced investors looking to embark on their wine journey. Investing in fine wine is easier than ever, thanks to specialised wine investment companies, relying on current market data and the latest technology.

The global wine market is forecast to reach US$525 billion by 2025. But while fine wine has emerged as a popular alternative investment, not every wine is investment worthy. For example, the majority of wines produced in renowned regions, such as Burgundy and Bordeaux – perhaps surprisingly – often won’t appreciate in value. In fact, of all the wines made worldwide, only a very small percentage have the potential to improve as they age, and an even smaller percentage of that group has the capacity to see its price rise.

Precisely this scarcity of investible wines is one of the main drivers behind wine investment’s profitability. The limited supply of collectible wine leads to price increases, especially for labels in high demand. This is why it is important to keep abreast of the latest market trends and factors influencing global appetite.

More fine wine investment opportunities than ever before

Historically, Bordeaux’s classified growths have been the leading force on the fine wine investment market. In 2010, Bordeaux took 96% of all trade on the global marketplace for wine. Today, it accounts for less than a third of this market by value.

The main reason behind its declining trade share is that the fine wine investment market is bigger and broader than ever before. Other French regions like Burgundy, Champagne and the Rhône, USA, Italy (led by Tuscany and Piedmont), Germany, Spain and Australia are increasingly seen as reliable sources of considerable wine investment returns.

Investing in fine wine is thus not limited to a small group of wines, contrary to what one might expect. There are more opportunities than ever before that can be suited to your stylistic preferences and budget. The collectors’ market is booming, with record number of investible wines trading right now.

Greater fine wine investment returns

As global demand for fine wine has grown, the investment returns have increased too. Burgundy is a prime example. Thanks to its iconic status and its tiny production levels, early investors in the sector have seen eye-watering growth: upwards of 2000% in 15 years for some wines. The volume, value and breadth of trading has increased significantly, and wine prices have risen dramatically over the last decade; the region’s major index is up almost 200% in the past ten years.

Meanwhile, investors in Champagne have benefitted from supremely consistent returns, although it is not the most expensive or the rarest of fine wines. Its brand strength and distribution network, however, remain unparalleled.

Prices for different regions and wines have risen at a different pace. Region and wine-specific factors thus play a role in the returns that an investor can expect, the cost and length of the investment.

How long do I need to invest in fine wines for?

Fine wine is considered a medium to long-term investment. As a general rule, we advise our clients to hold their wines for three years at the very least.

Many collectible wines have long ageing windows, between ten and 50 years. As the scarcity and quality of fine wine appreciates over time, so does its value. The premise of fine wine investment is to buy wine when it’s young, then sell it once it’s older and more valuable. There are other external factors that may help determine how quickly a wine may deliver the desired returns such as critic scores, supply/demand and significant events related to the region or the producer.

For instance, the price of the Super Tuscan Sassicaia 2015 went up 25% in the day when the American publication Wine Spectator announced its ‘Wine of the Year 2018’. Those buying and re-selling the wine on the day would have made a small profit; however, those holding the wine since release would have seen its value rise over 160% to the present day.

As a long-term low-risk investment, fine wine doesn’t lose its value overnight. Where share prices may increase one day and decrease the next, fine wine provides stable returns year after year. Its low volatility has led many to consider it the best ‘safe-haven’ asset – a great advantage particularly in times of market turmoil.

Unlike mainstream assets, fine wine is fairly insensitive to macro-economic events. When global markets tumbled due to ongoing Covid-19 restrictions and upon Russia’s invasion of Ukraine, fine wine remained resilient. The returns of leading fine wine indices were greater than the FTSE100, S&P500 and even other safe investments such as gold.

How do I start investing in wine?

There are a lot of decisions you need to make when taking on wine investment. Wine investment experts like our team here at WineCap can help you make decisions relating to the following factors:

Set a wine investment strategy

The first step is to set your budget. Consider how long you would like to hold your wines for and your preferred investment strategy. Fine wines command a range of prices depending on the producer, how much of their wine is made and the wines’ age. Make sure to set your budget before embarking on building your portfolio so you can ensure you have exposure to all countries and regions.

Speak to a wine investment expert

There are different routes to accessing the wine investment market, such as through specialised retailers and auction houses. Expert wine investment brokers offer unbiased advice on strategic investment opportunities and can help you build your portfolio, based on your preferred length of investment and budget. While WineCap doesn’t charge any annual fees, most wine investment companies do, so be sure to do your research and be aware of any fees your portfolio might incur.

Select world-class wines for your portfolio

A wine investment expert will help you find the wines best suited for your investment portfolio. WineCap has formed long-lasting relationships over the past decade with négociants, wholesalers and private collectors. This means that we have access to some of the world’s most prized wines. What’s more, our unique proprietary technology analyses over 400,000 wine prices a day to identify the right, undervalued wines to buy and sell across the global market at the right time and price.

Store your wines professionally

Choose to keep your wines in government bonded warehouses as this will ensure they are professionally stored in temperature-controlled conditions best-suited for ageing wines. World-class care ensures that when you come to sell, your wines’ provenance will quickly secure maximum prices.

Fine wine investment can be daunting if you are a beginner, but with a little practice and help you can soon enjoy the benefits of the best-performing luxury asset.

Ready to get started now you know more about how to invest in wine? Speak to one of WineCap’s investment experts to discover the next steps on your wine journey.

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Your Wine Investment Questions Answered

Man at laptop checking investments

Investment in fine wine is a great investment alternative for any hobbyist and can give you a healthy return too! But if you’re a novice to wine investment, you may have a lot of questions.

This article explores the most frequently asked questions about fine wine investment to help you understand more about it.

Wine Investment FAQs

Is wine a good investment?

As an alternative to stocks and shares, fine wine investment is a pursuit that has increased in popularity over the years. The scarcity and quality of fine wine appreciates over time, as does it value. This, among other contributing factors, makes fine wine a highly sought-after asset.

With a proven stable price growth, this medium to long term investment is a great way to strengthen your investment portfolio. It’s also a great excuse for any budding wine connoisseur to expand their collection!

Which wine appreciates the most?

It can be tricky to determine which wine’s financial value will appreciate over time, as it’s not always as simple as “the more well-known wines will give you a better return on investment”. For example, the vast majority of wines produced in renowned regions, such as Burgundy and Bordeaux – perhaps surprisingly – often won’t appreciate in value. In fact, of all the wines made worldwide, only a very small percentage have potential to improve as they age, and an even smaller percentage of that group has the capacity to appreciate in value.

Looking at the previous records of appreciation for wine can give you an idea of whether it is a good investment choice or not, as can keeping abreast of current trends and demands that are influencing the marketplace.

Is wine investment profitable?

According to a (the global marketplace for wine trade), the price of prices of fine wine increased in 2021 reaching an all-time high. The fine wine market often outperforms other global stock markets, making it a profitable alternative investment option for people who wish to expand their investment portfolio.

How do you store investment-grade wine?

It is important to make sure that wine is stored correctly, if they’re not stored in the correct conditions your wine could decrease in value.

Investment-grade wines are normally stored in bonded storage. These are secure locations that have been approved by HMRC for storing items that haven’t had VAT or duty paid on them.

These optimal storage conditions also tend to increase the liquidity of fine wine, making for quicker conversions of assets into cash.

What is the risk of investing in fine wine?

Like any investment, there is always an element of risk involved. One risk with wine investment is if a critic gives a negative review on a particular wine you have invested in, demand may dwindle and the value of the wine is therefore likely to decrease.

However, wine investment is considered to be a low-risk investment. The value of wine is protected during inflation and insecure economic periods, mostly thanks to its physical tangibility as an asset.

What tax is applied to my wine investment?

Fine wine is considered a ‘wasting asset’, which means that your wine is exempt from Capital Gains Tax when it’s sold. You can be charged Inheritance Tax, which is the tax on an estate of someone who has passed away if the estate is worth over £325,000.

We recommend seeking tax advice from a professional advisor before you start investing in wine.

How much should I invest in fine wine?

There is no set rule for how much money one should invest in fine wine. Investment-grade wines are a luxury commodity; to ensure you have a wide variety of options to invest in and to get a good return on investment, most people tend to start off in the vicinity of £5,000-£10,000 to make their investments worthwhile.

However, as with any given speculative investment, you should be prepared to lose that money. It’s not advisable to make such an investment if the loss of your invested funds would debilitate your financial situation.

What are good wines to invest in now?

When you look into wines that could be good to invest in, keep an eye on wine investing news to identify trends in the market and see where the opportunities are. You should also consider working with our investment experts, who will be able to give you unbiased advice on what wines you should be investing in.

Take a look at some of our related blogs for more information:

  • The beginner’s guide to wine investment
  • Ten of the world’s most expensive wines
  • Is buying Bordeaux En Primeur still a good investment?

There are several things to consider when you invest in wine. One of the most important things to consider, if you are new to the industry, is whether to seek the help of a fine wine expert.

What is important when investing in wine?

WineCap can give you access to the top investable wine allocations and an extensive portfolio of investment-grade wines, as well as guide you through the steps you need to take to get the most out of your investment.

Start investing in wine today

Schedule a consultation with one of our wine investment experts to start your wine investment journey today.

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Investment Options: Why Wine?

Bottles of wine in storage

Find out what investment options are out there so as not to miss out on wealth creation by holding excessive cash. That was the message from the Financial Conduct Authority (FCA) which launched a new campaign this week to both incentivise and educate Britons to invest their cash wisely.

The recent emergence of user-friendly apps and free time born of the global pandemic has drawn record numbers to the market in the hope of turning their down time into financial return. However, this surge of investment opportunism has given rise to poor decision-making; with many investors tantalised by the promise of big wins from high-risk strategies such as cryptocurrency and volatile stocks. The FCA’s double-pronged campaign aims to encourage more prudent investment, while at the same time educating about the risks. The watchdog is roughly targeting a fifth of the estimated 8.6m Britons who have over £10,000 in cash.

‘Over time, [they] are at risk of having their money eroded by inflation.’ – The FCA

This recent investment activity highlights that, with interest rates as low as 0.1% at the time of writing, those looking to either start investing or diversify their portfolios would do well to take advantage of the current trend and to consider investing in wine, a proven way of delivering growth.

The benefits of wine as an investment option:

  • In the last 30 years wine investment has delivered an average of 10% compounded growth

  • It is a tax-free investment with no Capital Gains Tax

  • It has a low correlation to other assets

  • Uniquely, wine both improves and becomes rarer with age, unlike other assets in the same class

Based on previous performance, solid returns could be realised after five years, though customers who have held their wine investments for up to ten years or more have seen even greater returns and any potential investor should consider a long-term strategy.

Ultimately, wine is considered an excellent opportunity to grow your pot of cash in a time where interest rates cannot. With good advice and the right selection, wine could be the best investment option you add to your portfolio this year.

Find out more by downloading our free guide to wine investment.

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How to Structure a Wine Investment Portfolio

Lady browsing WineCap site on laptop

A great deal can and has been written about how to structure a wine investment portfolio. Just Googling ‘Modern Portfolio Theory’, ‘Post-Modern Portfolio Theory’, or the ‘Efficient Market Hypothesis’ makes it clear that a few hundred words can only scratch the surface.

At times we may recommend – or clients may wish for greater exposure – to a particular sector. However, the common belief is that the best practice is to hold a good spread of assets and a good spread of asset classes. One of the (many) advantages wine has to investors is its relative simplicity and that it lends itself to fairly easy portfolio structuring.

Here are some things to consider when thinking about how to structure a wine portfolio: 

  • Know your goals & understand your timescales. You want to be able to take as much advantage as possible of wines’ ability to improve as it ages. As attractive as we think 2019 Bordeaux is, if you’re looking at a short hold it might not make sense to invest in En Primeur wine if its drinking window may not line up with your timescale.

  • Understand the veil of ignorance. While predictions can be useful, the future cannot be certain. Unless you have a functioning crystal ball, it’s good to have a reasonably broad selection. Hold a spread of regions, vintages and price points, but also keep an eye on holding varying formats too.

  • Don’t focus solely on the highest pinnacles when considering how to structure your wine investment portfolio. Oftentimes it is less heralded wines or vintages that outperform the market. Naturally, you’ll want to hold some tip-top wine, but make space for the less than stellar and perhaps even the objectively bad vintages. If you’re looking at well-priced examples of the best brands, there’s no reason to avoid off vintages on principle, Lafite 2007 and 2013 being great examples.

  • Have some flexibility. When building a portfolio we always have half an eye on the current shape of the wine market but it’s easy to be overly focused on sticking rigidly to a planned portfolio structure. Will it make a difference to your portfolio if you’re at 20% Burgundy or 25%? Probably a bit, but it is not going to be night and day.

It’s hard to know exactly what different sectors of the wine market will do in the next 12-24 months, but if you do your research and ensure broad holdings you can structure your portfolio for long-term stable growth. Want to talk to one of our experts about creating a wine investment portfolio in more detail? Schedule a call here.

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How does Wine Investment Work?

Two men drinking wine and looking at a laptop

Are you considering investing in wine and want to know how wine investment works? Congratulations, you are just one of the growing number of people who know that fine wine is a top performing alternative investment. Inflation hit 7% in April 2022 in the UK according to the Office for National Statistics (ONS). And it says it’s set to increase. Any serious investor should consider fine wine as an investment.

So, how does wine investment work? Here’s our recommendations:

-Buy with a medium to long-term view. Wine investment’s central idea is that it is an improving asset in diminishing supply. As time passes and the wines become rarer, they will be harder to find. This is why it’s always wise to enter the market with the intention of holding wines for a minimum of five years.

-Choose how much you want to invest and then diversify your wine investment portfolio. Select wines from different countries and regions for a balanced portfolio. We’d advise starting with traditional and well-established regions, such as Bordeaux. Many seasoned wine investors add a range of wines from different countries to their portfolios to create a spread.

-Make sure your wines are stored professionally. Perfect provenance of fine wine secures its value and desirability and is absolutely critical when investing or selling. A wine’s authenticity must be documented and assurance of proper storage should be available. WineCap stores all its wines in government bonded warehouses.

-Be in the know about fees. Some brokers charge an annual fee that’s known as a management fee to handle your portfolio. We pride ourselves on not charging one and also having the lowest brokerage rates.

-Prepare your exit strategy. When the time comes to sell your investment, there are a number of avenues you can go down. As your investment broker, we would advise you on the best route to take based on your wine’s position on the market at the time. Options include selling to wholesalers, private sales and auction houses.

Ready to start investing in wine? Find out more by downloading our free guide.

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Can you Invest in Wine?

Rows of vines in a vineyard

Investing in wine used to be intimidating. It was also considered only for the rich. Fortunately, things have changed. Wine investment is available to everyone and anyone who is looking for a stable alternative investment. It has – and continues to – deliver consistent returns. The category went up +13% from June 2020 to June 2021, according to the Knight Frank Luxury Investment Index. What’s more, only a modest amount of up-front funds are required to begin building your portfolio. While we always recommend speaking to one of our investment experts before getting started, fine wine is considered to hold fewer risks and more advantageous gains than nearly any other financial or alternative asset category.

Our Top Five Reasons to Invest in Wine

One: Fine wine has a low correlation with gold, oil and global financial markets. It has delivered consistent compounded growth of 10% over the last 30 years. By diversifying your overall investment portfolio with wine, you could add a safe investment that could bring stability and profits, regardless of the economic climate.

Two: It’s a tax-free investment with no Capital Gains Tax. Those who leave their cash in UK bank accounts will see their money eroded over time by inflation. Inflation is currently running at 4% in the UK at the time of writing and those wanting to make the most of their savings should seriously consider taking advantage of the tangible investment options out there.

Three: Fine wine is an improving asset in diminishing supply. The more corks that are pulled over time, the rarer the wine is and therefore the harder to find.

Four: Investing in wine is best when held for a mid to long-term investment period. The longer wines are held, the more opportunity you could have for higher returns.

Five: Perfect provenance of fine wine secures its value and desirability and is absolutely critical when investing or selling. Provenance is 100% guaranteed when you buy from us. All our wines are professionally stored in government bonded warehousing.

Find out how to get started investing in wine: download our free guide or contact us.

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How does Investing in Wine Compare to Similar Asset Classes?

Old wine bottles in a rack

Wine is part of a group of investments collectively known as ‘treasure assets’. These include things like art, jewellery, antiques, watches, antiquities, toys and classic cars. Those considering investing in wine as part of their wider portfolio often do so in the context of these other treasure assets, so it’s worth understanding the similarities and differences. While we wouldn’t want to discourage anyone from investing in other sectors, these differences illustrate why we think wine is the best option for most investors when it comes to treasure assets.

Investing in wine: its similarities to other asset classes

Product homogeneity: a homogenous product is one that cannot be distinguished from another and that can be easily substituted. While wine isn’t perfectly homogenous, it’s certainly close. As far as the market is concerned, one case is essentially the same as any other. It’s a different situation with most other treasure assets. The value of one Monet painting will tell you relatively little about the price another will fetch. Even with industrially manufactured products such as classic cars, their condition, mileage and service history can have an outsized impact on pricing and desirability.

Established storage and logistics: while it’s increasingly common for art to be stored in free ports and for classic cars to be kept in professional storage facilities, wine still has an advantage here. There is a long-established global network of affordable wine storage facilities that ensure a wine’s provenance is documented, as well as keeping it in top condition. Should the owner wish to stop investing in wine and drink it, final mile delivery can easily be arranged.

An established marketplace and data: in 2021, data on the performance of wine as a collective and on individual wines is relatively easy to obtain and to track. Thanks to product homogeneity, WineCap is able to provide valuations quickly and easily, allowing investors to know at any point, exactly what their wines are worth. Wine also has well-established marketplaces and a relatively low transaction cost. In comparison, art is usually sold at auction houses which command high fees, 20-30% is not unusual once all costs are considered, or in galleries where markups can be 50% or more. Costs to use online wine trading platforms or merchants such as WineCap are significantly lower.

Low cost: when compared with other treasure assets, even investing in wines that are at the top-end is somewhat affordable. This is one of the reasons why prices are generally robust and unaffected by the global economic climate. Imagine someone who regularly buys investment-grade wine; a financial crash might put them off buying a £20m Ferrari 250 GT LWB California Spider, but will it deter them from taking up their annual allocation of £15,000 Domaine de la Romanée-Conti?

Low cost of ownership: a Ferrari F40 has to have its fuel cells replaced every ten years and the parts alone for that one item could run to £30,000. If the batteries in your Mclaren P1 need replacing, that’s £100,000. A case of wine, regardless of value, shouldn’t cost more than around £15 a year to keep in perfect condition.

An improving asset in diminishing supply: there’s no other asset in this class that both improves and becomes rarer with age. This advantage is unique to fine wine.

Above all, the argument for wine is fundamentally one of investment returns. The graphs above show that, over the long-term, wine has comprehensively outperformed both the treasure assets it is most similar to, as well as more mainstream assets. We believe there is a place for investing in wine in any portfolio.

Want to find out more? Schedule a free consultation with one of our wine investment experts.