A new report from fine wine investment platform WineCap has shone a light on some interesting themes in this unique corner of the alternative investment space.
One of the key takeaways of the report is fine wine’s inverse correlation to the global equities markets.
Investment-grade fine wines skyrocketed in 2022 during what was otherwise a traumatic year for global equities.
According to the Liv-ex 1000 Index, which tracks the prices of top vintages from Europe, the US and Australia, fine wine shot up 40% while the stock market tanked to a generational low.
But that party has since come to an end, with fine wine prices steadily declining in 2023 just as global equities were making a comeback.
Though not a dramatic plunge, the Liv-ex 1000 dipped by 10% in the first nine months of 2023.
The Liv-ex Fine Wine 1000 Index cools off – Credit: Live-ex
“Overall, 2023 was a year of reckoning, recklessness, and rebellion,” remarked WineCap’s founder and chief executive Alexander Westgarth.
He continued: “For my universe of dedicated fine wine investors, the landscape was good but not perfect.
“The market benefitted buyers who took advantage of newly created pockets of opportunity. This is why demand for fine wine remained strong despite the ongoing macroeconomic challenges.”
Alternative investors go green
Sustainability appeared to be the top-line trend for fine wine in 2023, from WineCap’s perspective, driving demand among investors and leading to other positive developments in the wine industry.
According to WineCap’s Global Wealth Manager Survey, 54% of UK investors sought out alternative investment avenues like fine wine due to its sustainability and low carbon footprint.
This put sustainability as the most common reason for investing in fine wine, even above strong returns at 48% and tax efficiency at 42%.
“Over the next year, we will continue to research, post about and uncover the most sustainable practices for wine collectors and investors as their attitudes evolve,” stated WineCap.
As for the fine wine investment scene in general?
“The headwinds that the year might throw at us can be overcome by focusing on the endgame. We are confident that no matter the market environment, fine wine will always be highly in demand.”