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

Published On: December 17, 2020Categories: Latest News1.8 min read

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.

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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.

About the Author: Jonathan Adams

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