Investors should consider diversifying their portfolios through fine wine, 66 percent of advisers and wealth managers say, according to a report by Cult Wines, a fine wine investment company.
The report, entitled ‘Fine Wine versus Global Equities’, found that two-thirds (66 percent) of financial advisers believe investor portfolios have become too heavily weighted towards equities in recent years and 75 percent are concerned that these investors are over-exposed to raised levels of volatility.
In the report analysts highlight wine’s performance as a low volatility defensive asset class and demonstrate that wine compares favourably to the performance of global equities during periods of economic deterioration.
Over the 10-year period from December 2008 to December 2017 the Liv-ex Fine Wine 1000, an index which tracks the prices of 1,000 wines from top global wine-producing regions, experienced less than a third of the volatility of the MSCI World Index, and therefore, provided investors with greater consistency and more stable returns.
Some of the factors contributing to fine wine’s strong performance are: limited supply of fine wine, growing demand in emerging markets and the weakened pound.
Founded in 2007, Cult Wines Ltd is a global wine investment company with assets under management of over £80 million.