Fine Wine beats hedge funds and art works as stable investment

By Andrew Catchpole

Published: 11 April, 2019

Fine wine is a less volatile investment than all other major alternative assets, according to a new report released today by fine wine investment management specialist Cult Wines.

Benchmarked against a basket of alternative investments, including hedge funds, real estate, commodities and fine art, Cult Wine’s Alternative Investment Report 2019 claimed not only that fine wine is a less volatile investment than major alternatives, but that it also “offers superior risk-adjusted returns as part of traditionally diversified portfolio”.

The Report stated that while most alternatives performed negatively in 2018, fine wine returned a strong 9.2% growth in value, and that an investment portfolio including fine wine will have typically delivered a higher risk adjusted return of 8.63% between 2015 and 2018.

It also said that fine wine outperformed both the S&P 500 and commodities during the downturn of 2008.

“[Fine wine’s] low correlation to other asset classes - including other alternatives - and the excess returns generated indicate that exposure to fine wine provides resilience in tough market conditions combined with the opportunity for capital appreciation,” said Olivier Staub, investment director at Cult Wines.

Fine wine is not the only liquid alternative investment that is doing well. According to consultancy and brokerage Rare Whisky 101, whisky is becoming an increasingly sought after investment.

The consultancy has reported that more than 100,000 bottles of rare single malt were sold at UK auctions in 2018, representing a 29% increase on 2017, and hitting an all time record high.

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