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Generation sobriety turns to fine wine for alternative investments

Published:  03 February, 2022

Gen Z investors are turning to fine wine to boost their finances in the wake of the pandemic.

According to new research from global fine wine merchant Bordeaux Index, those under 25 who invest in liquid assets say they spend up to £20,000 per year on fine wine.

The poll, which canvased the habits of 2,000 UK investors, revealed that almost half (46%) invested in niche sectors such as fine wine, whisky, art and crypto. This number rises to 62% for investors under 25, while dropping to under a quarter for older investors over 65 (24%).

On the back of increased interest in wine following the pandemic, sales at global fine wine and spirits trader Bordeaux Index have increased by 44% YoY.

Matthew O’Connell, CEO of LiveTrade, Bordeaux Index’s online trading platform said: “For those worried about what 2022 may bring to their investments, wine’s clear capital preservation across the pandemic and its outperformance in 2021 (+19% versus +14% for UK equities) is clearly very encouraging.”

Whilst Bordeaux wines remain a favourite stable investment for the majority (48%), alongside Burgundy and Champagne (both 42%), investors have sought Italian wines (41%), given their increased global prominence. In fact, they now register with almost the same popularity as the more established investment regions.

English wines are also appealing to Gen Z investors, often coined the ‘generation of sobriety’, with almost half (47 %) saying they’re of interest, according to the poll.

However, investing is not worry-free: inflation (59%), Covid variants (56%), Brexit (55%), the impact of climate change (48%) and a lack of portfolio diversification (35 %) are all predicted to give investors reason for concern over the next six months.

But despite this, Gen Z investors are positive. Almost half (49%) feel confident that fine wine’s resilience makes it a good investment in times of crisis. Further, more than half (53%) also believe that fine wine investments offer low volatility and healthy returns.

O’Connell remains buoyant about the future of wine investment: “Given [wine’s] accessible entry point, history of alignment with inflation, and long-term track record of outperforming equities, it is unsurprising that investors, particularly those in the younger generations who have the thirst to look away from very traditional assets, are turning their focus to wine.”