The Financial Times has just published an article trumpeting the emergence of new wine investment funds following the bottoming out of the market in 2008.
Investors were revelling in rich returns for 5 years observing wine outperform the FOOTSE 100, the SP 500 and the Nikkei 225 until the economic downturn inevitably took its toll on the wine investment market. Two of the largest funds, the Vintage Wine Fund, and the Fine Wine fund, saw losses of 33% and 17% respectively.
Premier Cru Fine Wine Investment’s Investment Director claims that ““Historically, it [fine wine] has been the last investment to fall and the first to recover. I believe that prices have now bottomed out and early indications are showing that now is the best buying opportunity since the last drop in 1997.”
As Anthony Galan of the Red2Gold fund rightly states, “Extremely wealthy people haven’t stopped drinking great wine”. The claim that the price of many reputable vintages from certain groups of chateux seems to have bottomed out would lend credence to the appearance of a new growth curve, and therefore, a wealth of opportunity for wine funds prior to it. This is further supported by the Liv-Ex fine wine index showing slight increases throughout January and February. However, this index only covers a modest proportion of market trading and should not be considered an outright indicator of market behaviour.
Tags: Fine wine investment, Liv-ex