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WineCap Wealth Report 2024: US Edition

WineCap US Wealth Report 2024

In an era of economic uncertainty and shifting investment trends, alternative assets are gaining unprecedented traction. The 2024 WineCap Wealth Report (US edition) offers a comprehensive analysis of the fine wine market, uncovering key trends that highlight its burgeoning appeal. As fine wine transitions from a passion asset to a mainstream investment, the report explores the demographic shifts, technological advancements, and the factors driving demand. 

Methodology and demographic

In April 2024, WineCap surveyed 50 US-based full-time wealth and investment managers to gauge their views and sentiments towards fine wine investment. The respondents included 35 wealth managers, eight financial intermediaries/advisers, and seven independent financial advisers. The research was conducted via an online questionnaire. For annual comparisons, the report takes into account responses from a similar survey conducted in April 2023.

Key findings

  • Changing demographics: One in three high-net-worth individuals (HNWIs) in the US now invests in fine wine. While some begin as collectors, the majority are experienced investors drawn to fine wine for its stability. 
  • Rising demand for collectibles: Fine wine emerged as the leading collectible asset. According to our survey, 84% of US wealth managers anticipate an increase in demand over the next year.
  • Enhanced market liquidity: There has been a 14% increase in investor confidence regarding market liquidity, driven by advanced technology that enhances the trading experience and security.
  • Stability: 74% of respondents see fine wine’s stability through different market environments as the top reason to invest in it.
  • Universal value: 92% of US wealth managers recognize the benefits of fine wine being an asset of universal value, not pegged to USD.
  • Diversity: Survey respondents indicated that greater awareness of fine wine’s role in diversifying traditional portfolios could attract more clients.

The 2024 WineCap Wealth Report underscores the growing sophistication and accessibility of fine wine as an investment. As new generations of investors seek diversification and stability away from traditional financial markets, fine wine emerges not only as a stable asset but also as a leader in the collectibles market. 

The integration of advanced technology, the expanding appeal of sustainable investing, and the strategic adjustments in response to economic conditions highlight fine wine’s unique position in the investment landscape.

Download your complimentary copy of the 2024 WineCap Wealth Report and discover how fine wine can enhance your investment portfolio.

Please fill in the form below to download your complimentary copy of the report.

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WineCap Wealth Report 2024: UK Edition

WineCap UK Wealth Report 2024

As the investment landscape continues to evolve, so too does the appeal of alternative assets. The 2024 WineCap Wealth Report reveals a dynamic shift in the fine wine investment market, driven by changing demographics, technological advancements, and a growing emphasis on sustainability.

Methodology and demographic

In April 2024, we surveyed 50 UK-based full-time wealth and investment managers on their views and sentiments towards fine wine. 35 of the respondents classed themselves as wealth managers, eight as financial intermediaries/advisers and seven as independent financial advisers. The research was conducted via online questionnaire. For any annual comparisons in the report, we have taken into account wealth managers’ responses from the same survey conducted in April 2023.

Key findings

  • Changing demographics: Younger generations and less experienced investors are increasingly drawn to fine wine.
  • Rising demand for collectibles: Fine wine is the most popular collectible asset, with 92% of wealth managers anticipating demand to increase in the next year.
  • Enhanced market liquidity: The fine wine market is becoming more liquid, with a 32% increase in investor confidence in market liquidity. Advanced technology is enhancing the trading experience and security.
  • Sustainability: Fine wine is largely perceived as a sustainable investment, with 68% of respondents citing sustainability as a top motivation to invest in it.
  • Stability: Despite economic volatility, fine wine continues to act as a stable investment option and investors appreciate its uncorrelated market returns.
  • Capital Gains Tax (CGT) changes: Recent cuts to CGT have made fine wine more attractive, with 90% of respondents noting increased interest in fine wine investment.
  • Diversity: Survey respondents suggested that greater awareness of fine wine’s role in diversifying traditional portfolios could attract more clients.

The 2024 WineCap Wealth Report underscores the growing sophistication and accessibility of fine wine as an investment. As new generations of investors seek diversification and stability away from traditional financial markets, fine wine emerges not only as a stable asset but also as a leader in the collectibles market.

The integration of advanced technology, the expanding appeal of sustainable investing, and the strategic adjustments in response to economic conditions highlight fine wine’s unique position in the investment landscape.

Download your complimentary copy of the 2024 WineCap Wealth Report and discover how fine wine can enhance your investment portfolio.

Please fill in the form below to download your complimentary copy of the report.

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The rising demand for collectibles

Fine wine collectible
  • The impending largest intergenerational wealth handover is driving the expansion of the collectibles market.
  • Demand is rising among younger investors looking to diversify their portfolios with assets that offer uncorrelated market returns. 
  • Fine wine is the most popular collectible among UK investors, followed by luxury handbags and jewellery. 

From luxury handbags to fine wine and whisky, the collectibles market is expanding and attracting rising demand from investors that is set to continue. 

This shift is driven by the onset of the largest intergenerational wealth handover in history and a growing appetite among younger investors to diversify their portfolios with assets that offer uncorrelated market returns. 

The evolution of the collectibles market

The allure of collectibles as investments is not a recent phenomenon. Historically, items like fine art, rare coins, and vintage wines have been appreciated for their aesthetic and cultural value. During periods of economic uncertainty, tangible assets like these often retained their value better than traditional financial instruments. For example, during the Great Depression, art and rare coins rose in price, providing a hedge against financial market volatility.

In the post-World War II era, the collectibles market began to gain more structure and legitimacy. Auction houses such as Sotheby’s and Christie’s played pivotal roles in establishing benchmarks for the value of fine art and antiques. The rise of specialised indices, such as the Mei Moses Art Index, helped quantify returns on art investments, further opening the market.

The collectibles market has further evolved in recent years with the help of technology. Technological advancements have democratised access to market information and trading platforms, making it easier for investors to track market trends and make informed decisions. Indices like Wine Track help prospective investors see the average price of a wine, critic scores and investment returns over different time periods for free and at a glance. 

A testament to the rising demand is the expansion of the market. According to investment bank Nomura, the art and collectibles category is now larger than private assets ($1.6 trillion) and more than twice the size of private debt markets ($0.8 trillion). 

The most wanted collectibles for portfolio diversification

Among collectibles, fine wine is king. 92% of UK wealth managers anticipate demand to increase in the next year. Compared to other luxury assets, the fine wine market is more established and less volatile, offering increased liquidity and price transparency.

The second most popular collectible in 2024 is luxury handbags, with 86% of wealth managers expecting demand to rise further. As recently explored, interest in handbags as an investment has grown in line with rising prices in the primary market. For instance, the price of the Chanel medium classic flap bag is up close to 553% since 2005, and 4,809% since 1955.

Jewellery is the third most popular collectible in 2024 for 84% of wealth managers, followed by coins (82%). The fifth spot is shared by watches and rare whisky at 78%.

When it comes to the latter, fine wine investment companies are already capitalising on this trend by branching out into spirits. While its secondary market is still in the early stages of its development, rare whisky has already set pricing records.

Earlier this year, a 30-year-old bottle of The Emerald Isle by The Craft Irish Whiskey Co. sold for a staggering $2.8 million, breaking the world record for the most expensive bottle ever sold. The previous record was held by a 1926 Macallan bottle priced at $2.7 million. These figures dwarf the record for the most expensive fine wine ever auctioned, the 1995 Domaine de la Romanée-Conti Grand Cru, which fetched $558,000. 

Collectibles vs mainstream investments

The rise in demand for collectibles comes at a time when traditional investments, like stocks and bonds, are facing heightened volatility and lower returns. Collectibles offer a unique proposition: they are not directly correlated with financial markets, providing a hedge against market downturns.

Moreover, collectibles have an intrinsic value tied to their rarity, cultural significance, and aesthetic appeal, which can appreciate over time independently of market conditions.

The stability and growth potential of these assets make them attractive alternatives to traditional investment avenues, and investors are increasingly perceptive of these benefits.

As the market for collectibles continues to evolve, clients are likely to find new and exciting opportunities in this dynamic sector.

WineCap’s independent market analysis showcases the value of portfolio diversification and the stability offered by investing in wine. Speak to one of our wine investment experts and start building your portfolio. Schedule your free consultation today.

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Fine wine vs luxury handbags: the investment perspective

Luxury handbags vs fine wine
  • Luxury handbags are the second most popular collectible item among UK wealth managers in 2024, after fine wine.
  • Rising prices in the primary market for handbags have led to investment interest.
  • While valuations for brands like Chanel and Hermès have spiked dramatically, the secondary market is less established and more illiquid than the fine wine market.

Recent headlines have been filled with news about skyrocketing prices for luxury handbags. The price of the Chanel medium classic flap bag has risen close to 553% since 2005; and 4,809% since 1955.

With prices in the primary market reaching record highs, interest in handbags as a collectible has grown. The term ‘investment piece’ no longer serves to simply describe the timelessness of an item; for investors today, it has taken a much more literal meaning.

Meanwhile, fine wine remains a more established member of the ‘collectibles’ family. In recent years, fine wine has transitioned from a passion investment to a mainstream asset class.

This article explores the shift in investment trends, the rising popularity of luxury assets, and the risks and rewards associated with fine wine and luxury handbags.

A shift in investment trends

Traditionally, investments have been confined to stocks, bonds, and real estate. Now, they are sharing the spotlight with more tactile assets like fine wine and luxury handbags.

According to our recent survey among US and UK wealth managers, there has been a significant uptick in interest for collectibles. In 2024, 78% of US wealth managers expect demand for luxury handbags to increase, complemented by a strong ongoing interest in fine wine (84%).

In the UK, 86% anticipate growth in demand for luxury handbags, up 6% from 2023, while 92% expect sustained demand for fine wine.

The full findings of this survey will be released later this month.

Comparing fine wine vs luxury handbags

Fine wine is sought after for its stability and remains the top investment choice among alternative assets. Its secondary market is more established, offering increased liquidity and price transparency.

It does not lack impressive performers either; luxury Champagnes Salon Le Mesnil-sur-Oger Grand Cru has appreciated 304% over a decade, and Egly-Ouriet Brut Millésime Grand Cru has seen returns of 452%. Prestigious Burgundy wine, Domaine René Engel Vosne-Romanée is up 3,105% over the same period.

Although luxury handbags are a newer investment avenue, they have shown considerable promise. The valuation of iconic pieces like the Hermès Birkin and Chanel Flap Bag has spiked dramatically, reflecting their growing appeal among investors who value both fashion and finance.

Chanel bag prices

Celebrity endorsements

Celebrity endorsements have significantly influenced this market segment. For instance, the Louis Vuitton Pochette Accessoires bag retailed for $165 in 2001; today, it costs $1,520 – an increase of 821%. Over that period, celebrities like Paris Hilton, Nicole Richie, and even fictional character Carrie Bradshaw have boosted its value.

This phenomenon is less prevalent in the world of fine wine, though not entirely absent. Domaine Dujac, for instance, became a brand on the move (the highest riser in the 2018 Liv-ex Power 100 rankings) due to DJ Khaled’s endorsement in a music video.

Investor demographics

Another key distinction between these investment avenues lies in their typical investor demographics. According to the Financial Times, luxury handbags tend to attract younger female clients, who are drawn to both the fashion statement and the investment potential of these pieces. In contrast, the typical fine wine investor is often older and male, with a preference for the historical depth and long-term value appreciation that fine wines offer.

Risks and rewards

Investing in luxury handbags comes with its set of challenges. Unlike fine wine, which can be stored and aged with relative ease, handbags require meticulous care to maintain their condition and value.

Additionally, the market for luxury bags is more volatile, influenced heavily by trends and the limited number of high-value players like Hermès, Chanel, and Louis Vuitton. Future demand for specific models or brands can be unpredictable, and the resale market is often less liquid than that of fine wines.

Both fine wine and luxury handbags offer intriguing opportunities for portfolio diversification, each with unique benefits and challenges. The consistent performance and security of fine wine make it a reliable choice for those seeking steady growth. In contrast, luxury handbags can provide the pleasure of owning a piece of high fashion, though they carry higher risks.

As the luxury investment landscape continues to evolve, the blend of passion and profitability remains a compelling draw for high-net-worth investors globally.

WineCap’s independent market analysis showcases the value of portfolio diversification and the stability offered by investing in wine. Speak to one of our wine investment experts and start building your portfolio. Schedule your free consultation today.