Some of the most lucrative investments increase their value with age, and vintage fine wine is no exception to the rule.
A survey by Barclays Wealth and Investment Management as detailed in the Telegraph article 5 Fine Wines that beat the FTSE'
Investing in fine wines has transformed from a passion project for those with cash to invest into a huge £4.7bn industry. Vintage and Fine wine has been labelled as a safe haven that could offer protection in an economic downturn. So how do you go about investing and which are the fine wines to invest in now and in 2020 onwards. Before starting to invest or boosting your existing fine wine portfolio, we always advise on soughting advice from wine investing experts.
The Liv-ex Fine Wine 1000, which tracks the prices of the most sought-after wines in the market allows you to look back at the fine wine market and how it's compared against the global stock market including the FTSE index.
Why Invest in Fine Wine?
If you tracked the prices for the top 150 best wines since 2007, they actually rose by 1% per year, which is a superior record when compared to some of the more traditional investment strategies.
Reasons to start investing in fine wine:
- A safe haven alternative investing strategy, that can offer a buffer against a down turn in the economy - a viable diversififactio strategy for those with a property or stock portfolio.
- Increasing global demand from Asia coupled with decreasing supply - there is an inherent traction upwards and that is sometimes followed by an increasing price for a carefully chosen wine portfolio.
- Tax breaks with No Capital Gains Tax to pay on profits,, as fine wine is defined as a wasting asset.
Five Fine Wines that have Beaten the FTSE.
With an increase of 5 times that of the FTSE, here are the top 5 wines you could invested in over recent years, since 2007. They increased at least three times faster then the rise in the FTSE 100, without dividends reinvested over the same period.
1. Chateux Picohon Baron, 2007 Vintage :an outstanding performer
This fine wine grew investors money by 64 percent compared to a rise of 12% for the FTSE during those 5 years. Impressive!
Even if you factor out the global credit crunch and the Brexit factor, they would have still likely out performed the stock market and made very favourable returns during that period.
Producer: Chateau Pichon-Longueville Baron
Awards: Le Guide Hachette des Vins, 2011: 2 Stars Coup de coeur
Grape/Blend: Bordeaux Blend Red
Wine Style: Red - Savoury and Classic
2. Moet & Chandon's Dom Perignon, 2000: a classic and 5 star performer
Returns of 55% since 2007 compared to 12% for the FTSE.
3. Comte Vogue Musigny VV 2005: bravo for this outstanding Burgundy
This fine wine also received healthy returns since 2007.
4. Italy's Sassicaia 2005:
Average Price (ex-tax) of the Sassicaia 2005 is £290 for 750ml. The current Market Price is £2,100.00 for 12 bottles x 75cl.
5. Opus One, Californian, Vintage 2005:
A joint venture between Robert Mondavi and Baron Philippe de Rothschild. A complex blend iofCabernet Sauvignon, Cabernet Franc, Merlot, Malbec and Petit Verdot.
All the above grew in value by more than 35% over the same period. But what about now, investing in vintage & fine wine for 2020 and onwards?
Fine Wines predicted to Out perform over the coming years...
So what for the future? What wines should investors look to invest in and hedge their portfolio in these unpredictable times?
1. Clos de la Roche Grand Cru: a bottled gem with a positive outlook
At around £200 per bottle, this is a good buy. The best vintages of this wine could easily double in value over the nexct 5 years.
2. Les Grands Teppes Vielles Vignes: predicted as a future top performer
This has already started to pick up in price. Now with an average price of £74 for 750ml, already up from £65 in November 2019, is predicted top perform well over the next few years.
3. The Absurd from Realm Cellars: an eclectic mix with a unique label to match
Produced by Realm Cellars in the Napa valley. A 2017 Realm The Absurd Napa Red Blend currently (Feb 2020) goes for around £540 per bottle. The Absurd could be one varietal, it could be five. It could come from one vineyard lot, it could come from a dozen.
4. The Screaming Eagle: one to watch and may soar to new heights
A bottle of 2016 Screaming Eagle The Flight in OWC (3 x 750ml) Vinous 98 can go for around $2295. This wine of 2016 appears to have a very bright future and one to contemplate for your new or existing wine portfolio.
5. Case Basse di Gianfranco Soldera, 2013: limited supply & high demand
Snap up some of this stock before it is too late! Currently around £2000 for 6 bottles is one not to be missed.
Interested in Wine Investing? How to Invest?
Get in touch with UKV International AG fine wine experts, and find out more.