Alternative Outlook

Since 1988, when reliable data first became available, the fine wine market has generated an annualised return of 12.1 per cent.

However, investment is about risk as well as return, and on this dimension too, wine performs well. Taking every five-year period since 1988, wine has shown a negative return in just one period – with a loss of only 1.1 per cent. By comparison, the FTSE 100 has seen 72 negative periods, with the worst being a loss of 39 per cent. Historically, fine wine has proved to be a low-risk asset class. To understan…

Investors face being ripped off buying overpriced plonk dressed up as fine wine that will grow in value. One wine fund has issued ten top tips on how to avoid losing your bottle.

The tips come hot on the heels of a claim in the Financial Times that one wine fund overvalued its stock and a proposal from the regulator, the FSA, to ban the selling of these types of investments to ordinary members of the public.

Wine funds come under a category the regulator calls Unregulated Collective Investment Schemes (UCIS). It wants to ban these f…

When it comes to investing in fine wines, investors appear to be concentrating on French produce alone and may be missing out on grapes grown in Austria, Italy and Portugal, according to research published by professors at the University of East Anglia’s Norwich Business School.

Dr Apostolos Kourtis, lead author of the report and a professor at the school, says: “The investment market deals mostly with French wines, but we found that diversification across the different varieties of French wine is not that effective.

“However, our r…

If the secret to investing is buy low and sell high, the steep drop in fine wine prices – down between 25% and 40% from a year ago – could be an opportunity to diversify a portfolio – or not.

“I think there’s plenty of air left in this bubble. There’s more of this drop to come,” economist and author Robin Goldstein said on the sidelines of the American Association of Wine Economists’ (AAWE) annual conference at Princeton University last week.

Some investors are hoping alternative assets like fine wines will net them better retur…

Investors in fine wine see 10pc annualised returns over past five years compared to FTSE’s 0.03pc. Investors in fine wine have seen double digit annualised returns over the past five years – a period when the FTSE 100 has failed to grow at all.

The Wine Investment Fund, a closed-ended trust that invests only in Bordeaux wines, announced annualised returns of 10.04pc over the past five years compared to the blue chip index’s paltry 0.03pc. The Fund, holds an average of four tranches a year, locking investors in for five years has managed av…

Wine investing is seen as a diversifying element in a portfolio, with returns that are relatively uncorrelated to traditional investment markets.

But with volatility at unprecedented levels in the past five years it is no surprise wine markets have felt some of the upheaval.

This was clearly demonstrated in the second half of 2011 when the Liv-ex 100 Fine Wine index, which represents the price movement of 100 of the most sought-after fine wines for which there is a strong secondary market, fell by 21.5 per cent.

To take advantag…

Fine wine investment specialist,  (TWIF) predicts that the main wine index (the Liv-ex 100) will finish 2012 10% above its 2011 year-end level.

TWIF has published its first ever ‘fan chart’ showing the probability of various different wine market returns over the next 12 months, in the same format used by the Bank of England to forecast inflation.

The prediction comes on the back of previous markets (1998 and 2008) which saw the market hit a low point in December and recover sharply the following year.

With graphical analysis also…

One of the most popular, most talked about and most successful alternative investments has been fine wine. But is it a genuine opportunity for retail consumers or just the preserve of a few knowledgeable specialists?

Wine Investment

One of the reasons investors are so attracted to wine as an asset are the impressively high returns. Over the last ten years the Liv-Ex Fine Wine 100 index has enjoyed a 14.1 per cent compound annual growth rate. Last year, fine wines returned an impressive 40.5% and fine wine is continuing its strong start to…