Wine provided investors with the best returns of 2001, according to a recent FT report. It led modern art, photography and other alternative investments in outperforming traditional stocks and shares.
Wine outperformed the Standard & Poor’s Index – widely regarded as the benchmark for US stock market performance – by 92 per cent; while American modern art and photography saw gains of 85 per cent and 65 per cent above those of standard stocks.
In its report, the FT drew on figures released by asset management house GAM, which showed a rise in art, wine, antiques and other such investments last year. Head of GAM Graham Wainer is quoted as saying that clients are increasingly reluctant to take risks with volatile funds and bonds. The lowest interest rates for decades and disappointing equity markets have taken their toll.
But wine didn’t just take the top spot in 2001 – it has beaten the S&P index every year since 1997, making it one of the most stable bets in the investor’s portfolio.
Not surprisingly, opportunities for wine investment have proliferated and online sales have grown exponentially in the wake of the highly successful Bordeaux 2000 vintage, which was released en primeur last year. Online exchanges, such as Uvine.com, as well as merchants’ own sites have made it easier for investors to buy bluechip wines. In addition, sites such as decanter.com‘s Fine Wine Tracker and the online trading floor WorldwineXchange.com offer an easy way to track the performance of the wines.
Those who want to cash in on the boom in the fine wine market, but feel that they lack the knowledge to make wise investments can now put their capital into one of the funds that have been set up to take advantage of the growing market. Those with at least €25,000 (£16,000) to spare can invest in the AWM Fine Wine Fund, an offshore fund that invests in Bordeaux, Burgundy and New World shares, while the ‘Premier Cru’ fund of Société Générale Asset Management focuses on venture capital.
Written by Liz Hughes