Liv-Ex Marketplace says investments in fine wines have outperformed stock market this year

by Jonathan Adams

Returns on investments in bottles of fine wine worth up to £20,000 have outperformed stock market returns, says online marketplace Liv-Ex. Of the world’s leading stock market indices, only the S&P 500 has outperformed the 4.65% returns on bottles of in-demand wine.

More people have also been buying fine wine online this year, driving Liv-Ex’s trade volumes to £83 million, compared to £50 million in 2019. However, demand for Bordeaux, the traditional region of investment-grade wines, has dropped. In 2019, trade in bottles from the Bordeaux region made up 54.4% of Liv-Ex’s volume. That dropped by over 12% to 42.2% this year. The drop in interest is attributed to the 25% tariffs the U.S. last year slapped on some EU imports, including Bordeaux.

Italian wines, which the new tariff doesn’t apply to, were the biggest beneficiary. Their share of Liv-Ex’s trade volumes is up to 15.3% this year, from 8.8% in 2019. And it was an Italian bottle, the 2013 Barolo Monfortino Riserva, that was the most traded wine on the platform this year. It sold at an average price of £8196 for a case of 12 bottles.

The highest price fetched on the platform was, however, still for a French wine. One investor forked out £20,737 for a single bottle of 1990 Romanée Conti.


key indices

Source: Liv-Ex

In addition to its online wine trading marketplace, Liv-Ex also runs fine wine indices. The best 2020 returns have been generated by the Champagne 50 index, which is up 8.27% for the year-to-date.

While fine wines have often demonstrated good investment potential in recent years, they are an alternative asset class that wouldn’t be a suitable fit for a standard investment portfolio. The sector is best approached as a hobby investment by wine enthusiasts, with enjoyment of the bottle in first place as a consideration. Then, if prices go in the wrong direction, at least the wine itself can be enjoyed.

Liv-Ex does offer investment services for wine buffs who would like to speculate with a portfolio of fine wines, including offering appropriate cellar storage. Wine investments can be traded without ever leaving a bonded cellar. But the owners still always have the option of bringing it home and drinking it rather than selling it on, hopefully at a profit.

This article is for information purposes only.
Please remember that financial investments may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.
There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

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