Fine wine consistently outperforms equities and gold during periods of economic uncertainty, according to our latest research. In our report, we reveal that wine demonstrates distinctive qualities that protect investors from some of the risks inherent in an equity-based portfolio.
Cult Wines analysts compared the Liv-ex Fine Wine 1000 – the broadest measure of the fine wine market – with the FTSE All Shares index and gold futures during the depths of the financial crisis between 2008 and 2010, and during the peak of the economic recovery between 2015 and 2017.
During the crisis, the Liv-ex 1000 returned just under zero, while the FTSE All Shares index dropped 25% and gold 5%. Over the later recovery period, wine returned 10%, while the FSTE index returned roughly 9% and gold futures 8%.
“With global equities markets potentially facing the end of a record bull market, it is important to highlight fine wine’s ability to help investors avoid downside risk,” said Tom Gearing, Managing Director of Cult Wines. “Our report shows how fine wine can act as a defensive asset class in times of economic crisis but also benefit from periods of economic growth.
“We’re optimistic about the future growth of the fine wine investment market,” Gearing added. “With the right expertise, investors will have the significant opportunities to bolster their portfolios with a stable, defensive asset class.”
