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Generation Z investors ‘turning to fine wine’

New research has suggested young investors in the UK are embracing fine wine alongside other alternative assets.

A survey of 2,000 investors in the UK found links between Generation Z, loosely covering those up to 25 years of age, and fine wine investment.

While close to half of all survey respondents said they had invested in so-called alternative assets, such as fine wine, whisky, art or crypto, this proportion rose to 62% for the under-25s.

Commissioned by merchant Bordeaux Index and conducted by market research agency 3Gem, the survey suggests younger investors ‘are turning to fine wine’ as a way to grow wealth, the authors said.

It comes amid evidence of a strong fine wine market. Bordeaux Index recently reported record wine and spirits sales in 2021.

Of the respondents under-25 who invest in wine, nearly three-quarters spend up to £20,000 per year on top bottles, found the survey. Seven percent said they spend between £50,000 and £500,000 per year.

While nothing is ever guaranteed in terms of returns, 55% of respondents aged under 25 said they thought wine investment offered long-term stability within a portfolio.

Thirty-nine percent of all survey respondents – across age groups – said they chose wine due to its relatively accessible entry point, compared to other alternative assets.

However, the survey also highlighted key concerns for the general investment environment.

Inflation, the possible impact of new Covid variants, Brexit and climate change were among the main worries.

Matthew O’Connell, head of investment at Bordeaux Index and CEO of its LiveTrade platform, said, ‘For those worried about what 2022 may bring to their investments, wine’s clear capital preservation across the pandemic and its outperformance in 2021 (+19% versus +14% for UK equities) is clearly very encouraging.’

Sotheby’s recently highlighted the appeal of fine wine and spirits to younger collectors in general in its auction sales report for 2021. Around 40% of wine and spirits auction buyers in 2021 were new to the scene, and one third of bidders were aged under 40, it said.

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