📈Performance

Wine performs favourably vs. mainstream equity indices over both the long and short term.

Performance

Fine wine, especially on a regional level, compares favourably to mainstream equity indices even when factoring in dividend reinvestment.

The graph below compares the long term performance of various mainstream asset classes compared to a price-weighted index of ~8000 frequently traded fine wines.

The wine market downturn in late 2023 / early 2024 has led to blue chip assets trading well below their all time highs, providing an attractive opportunity for new investors looking to access the asset class.

Source: WineFi, data from Liv-ex as of 01/0/23. S&P500 = S&₽ 500 (TR); FTSE100 = Shares Core FTSE 100 UCITS ETF GBP (Acc); Bonds = iShares 7-10 Year Treasury Bond ETF; Fine Wine = global price-weighted index of ~ 8,000 most liquid investment grade wines; Fine Wine EW = equal-weighted index of the same basket of wines.

Risk-Adjusted Returns

As well as the market's favourable supply-demand dynamic, wine's volatility profile stems from a lower liquidity. Whilst this can be a drawback, it does mean that the asset class is protected from panic selling in the event of a broader economic downturn.

As a result, wine exhibits favourable risk-adjusted returns compared to other asset classes. This is demonstrated by a higher Sharpe Ratio (shown below), which is a measure of the average return of an asset in excess of the risk-free rate and relative to its volatility.