Focus continues to broaden with further diversification in the wine market. With US and “emerging“ markets experiencing growing demand, more wines from these regions are now being traded on Liv-ex –the global trading platform for fine wine.
Our research on US and emerging wine markets revealed several interesting facts, including the following trends:
- Next to Burgundy, Chile and US are the two fastest-growing regions with consistent returns.
- CW Chile Index has returned an attractive CAGR of 13.24% since its inception on September 2011.
- Californian wines have proved to provide higher returns, with Opus One and Screaming Eagle leading the gains.
- Fine wine market exposure to New World wines is becoming more mainstream as distribution channels widen and global demand rises.
- New vintage allocations for top US wine producers are already becoming challenging for investors.
Diversify your Wine Investment Portfolio with wines from US and Emerging Markets
Based on the findings within our report, we suggest that investors allow for a tactical allocation of 5% to 10% of their total portfolio to US & Emerging Market wines ( depending on risk profile), adding carefully selected producers from US and emerging regions such as Chile, Spain, Australia, Argentina and Loire Valley.
Our relative value based analysis confirms that investors seeking high growth should focus their attention on this segment of the market. We highly recommended to be diversified across a range of different wine growing regions to increase the risk/reward of the wine portfolio.