Fine wine proves canny investment in 2010

Published: 05 January, 2011

Fine wine proved a canny investment for 2010 ? outperforming other assets by providing investors with a 32% return.

Fine wine proved a canny investment for 2010 ? outperforming other assets by providing investors with a 32% return.

The fine wine merchants and traders Bordeaux Index predicted 2011 will be another strong year for the category as order books were already "groaning" after the first full day of trading yesterday.

December's price rise was limited to 1% - less than those enjoyed by shares, gold and oil - but throughout 2010 wine outperformed all other asset classes for the second year in a row.

The returns of 32% are substantially higher than the 22% rise in gold. And over the last 15 years, the average annual return on fine wine has been 15%.

"A classic Christmas rally sent equity markets to the year's highs as traders bet on continuing strong growth for emerging markets and a firmer US recovery in 2011," said Bordeaux Index founder and managing director Gary Boom. "With cyclical bulls viewing the surge in the US 10-year Treasury Note as a sign that growth could be about to take off and yet more talk of further monetary stimulus in the spring, analysts are predicting both commodities and equities to show well in 2011."

"With another first class en primeur vintage waiting in the wings, buyers are already acquiring positions in the most desirable back vintages in advance of the new release," said Boom. "You've also got to factor in customary large outgoings that will accompany next month's Chinese New Year. Given these dynamics, our expectations are that prices will continue to climb through the first quarter."

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