SINGAPORE (July 2): Fine wine performs favourably during global economic downturns, demonstrating that it is a defensive asset class for investors who hold equity-dominated portfolios, say analysts at fine wine investment company Cult Wines Ltd.
According to the firm’s Fine Wine vs Global Equities report, the Liv-ex 1000 index — which tracks the price movements of 1,000 leading fine wines on the secondary market — was one of the best-performing indices last year, having risen 11.3%. Its performance was only surpassed by the Burgundy 150 Index, which only tracks the price of wines from the French region.
“Considering risk and volatility, holding a fine wine portfolio is expected to show lower volatility of returns compared with a 100% equity-based portfolio. Nowadays, the performance of marketable securities is considered volatile. We believe investing in alternative assets can offer some stability, both in the short and long term,” says the report.