Why Wine?
Fine wine can offer investors attractive, uncorrelated risk-adjusted returns and low volatility. In many jurisdictions, including the UK, fine wine is exempt from Capital Gains Tax (CGT) in many circumstances.
Capital at risk
18+ investors
What’s the secret?
The key to fine wine’s performance as an investment is simple.
Inherent Scarcity
Only a finite number of investment-grade wines can be produced per year, the quality of which varies from vintage to vintage.
Declining Supply
As bottles from a certain vintage are consumed or damaged over time, they become increasingly scarce.
Increasing Demand
At the same time, as fine wine improves with age and global wealth continues to grow, demand for these sought after wines increases.
A Classic
Veblen Good
This combination of ever increasing scarcity and growing demand helps to drive prices higher.
300%
Total Returns
Since 2004, the Liv-ex 1000 has achieved total returns of 300%
Fine wine, especially on a regional level, compares favourably to mainstream equity indices even when factoring in dividend reinvestment.
Uncorrelated
Returns
Fine wine is uncorrelated to traditional asset classes like equities, bonds and commodities, making it a valuable diversifier.
Low
Volatility
Fine wine’s return profile is accompanied by lower volatility than many other asset classes.
CGT
Exemptions
In many cases in the UK, fine wine is regarded by HMRC as a “wasting asset”. Wasting assets are regarded as those with a useful life of less than 50 years. In these circumstances, no capital gains tax is payable. This exemption also carries through from wine held by a WineFi syndicate.
Regional
Diversification
Each wine region performs slightly differently to one another, allowing for further diversification within the asset class itself. This is in contrast to This is in contrast to commodities like oil, and more akin to a “mini stock market”.
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