Stability in the cellar
Fine wine markets maintained their upward climb in 2022, which is more than can be said about most financial assets. Our outlook last year stressed how fine wine’s rally had room to run and the market delivered. As of the end of November, the Cult Wines Global Index, our broadest measure of the market[1], had risen 19.40% on the back of surging Burgundy and Champagne prices. This contrasts with steep losses in many global equity and bond markets. Traditional 60-40 portfolios suffered from volatility amid multi-decade inflation highs, soaring energy prices, deteriorating economic growth and geopolitical tensions.
Cult Wines Global Index vs major financial indices (31 Dec 2021 – 30 Nov 2022)
Source: Pricing data from Wine Searcher as of 30 Nov 2022. Analysis by Cult Wine Investment. Past performance is not a guarantee of future returns.
Now we turn our attention to 2023 with a three-part 2023 Cult Wine Investment Market Outlook that aims to simplify what to expect in the year ahead.
- Part I - Macro Outlook: We explain our view that fine wine can continue to display favourable relative performance even though some caution is warranted.
- Part II - Regional Outlooks: We look at each individual fine wine region to help assess which market segments offer the most potential.
- Part III – Key Themes: We look at a few major themes that are transforming the global fine wine market.
[1] The Cult Wines Global Index was recently launched as a new benchmark measurement of the global fine wine market performance. Using Wine-Searcher data, the Index is comprised of a dynamic set of wines that represents the fine wine investment market based on strict liquidity criteria. For a full description, please see CultX.com/indices
Part I – Macro outlook: Positive fundamentals outweigh risks
Fine wine’s track record of providing stability and diversified returns during different backdrops was on display during the tumultuous 2022 and will get tested again in 2023. Here we assess the risks to market and highlight why strong market fundamentals underpin our two-tier outlook: relative positivity in the near term and a more favourable long-term view.
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