A fine wine portfolio can bring different things to different people. For some, it is a chance to indulge in a passion by collecting some of the world’s finest and rarest wines. Others will recognise how fine wine can form an important part of an investment portfolio, which has led to its increased acceptance in discussions about alternative assets.
The main reasons why investors might turn to fine wine and other alternative assets include enhancing the return potential of their portfolios, increasing diversification, or hedging against market risks.
Fine wine’s investment benefits were on full display in 2022, while traditional 60-40 portfolios suffered amid inflation, deteriorating economic growth and geopolitical tensions.
“Given the uncertainty around the economy and a lot of talk about recession, people are looking for alternative places to invest their money – and many are turning to wine.” 
Shana Clarke, Fortune, Freelance Journalist
Fine wine vs other assets
Total returns of Cult Wines Global Index and select financial indices
Fine wine’s ability to deliver strong, consistent returns through the turbulent 2022 forms an example of its potential as an investment. Here at Cult Wines, we believe fine wine remains an attractive long-term component of a portfolio.
|2022 Return||12-month||3-year||5-year||5-year Volatility*|
|Cult Wines Global Index||17.40%||13.38%||40.23%||50.75%||1.09%|
|S&P 500 (TR)||-18.11%||-7.71%||41.02%||59.71%||5.39%|
|FTSE 100 (TR)||4.70%||9.63%||32.46%||31.71%||4.03%|
|Nasdaq Composite (TR)||-32.54%||-15.96%||36.91%||64.77%||6.31%|
|iShares MSCI All Country Asia ex Japan ETF||-21.66%||-16.73%||-4.20%||-14.69%||5.71%|
|Gold (in USD)||1.55%||-5.76%||16.20%||37.89%||3.98%|
|Bloomberg Commodity Index||-64.22%||-7.33%||49.56%||20.44%||4.62%|
*Fine wine = Cult Wines Global Index; **US Treasury Bonds = iShares 7-10y US Treasury Bond Index.
Volatility = Rolling 5-year standard deviation of monthly returns.
Source: Wine-Searcher, Investing.com as of 28 February 2023.
Past performance does not guarantee future results.