Wine market performance
As these figures show, the longer you hold on to a fine wine, the more consistent returns become. This is because, over the long-term, the demand-supply imbalance is exacerbated by increasing consumption and subsequently decreasing availability, and therefore wines become more desirable due to rarity, plus improving quality as they age.
As the 10-year line (second graph) indicates, fine wine has never shown a negative return over a 10-year hold, averaging 12.3% growth with a standard deviation of 3.6%, highlighting the low volatility of wine as an asset.
“Fine wines have been known to outperform the FTSE100 and Dow Jones, offering significant returns for investors, and under current legislation these returns can be enjoyed free from CGT.”
Why invest in Wines?
The financial crisis back in 2008 had sent shockwaves through financial markets across the globe, however, the asset class that weathered the storm better than others were vintage wines.
Market volatility and record low interest rate over the past decade has led to the search for more diversified investments, particularly physical assets that have basic intrinsic value, where supply is limited and demand is set to continue to grow.
Investing in fine wine brings a raft of benefits. To begin with, adding a new asset class such as fine wine to an investment portfolio provides important diversification, which mitigates risk and reduces overall levels of volatility – wine is a tax-free asset that performs consistently while providing the much needed downside protection to a portfolio in a way that traditional financial assets fail to offer. Fine wine investment can act as a defensive holding as it has the capacity to remain stable under difficult economic conditions. It has the advantage of not necessarily following the general trend of lagging behind financial markets during economic expansion because global demand is consistently strong and supply is consistently limited.
Of course, returns are important, and as our research has shown, fine wine has historically produced long term average returns in the region of 13% per annum, while also showing a low correlation with traditional financial assets. At times when economies and financial markets have suffered, trending downwards, wine has provided recessionary proof characteristics, thus highlighting the underlying benefit of investing in a physical, tangible asset. Equities can go bust and bonds can default, as the slogan of the centuries old Chateau rightly reads, "Mouton ne change", a bottle of Mouton will always be a fine bottle of Mouton!
Why Invest with Geneva Capital?
Our clients have complete peace of mind knowing that their fine wines are always kept safely stored in our state-of-the-art cellars in Provenance in Bond (PIB), never leaving Bordeaux until the moment you so desire. Tax-free and hassle-free, that special vintage delivered to your doorstep just in time for your next special occasion.
Each client has their own assigned portfolio manager dedicated to matching their exact investment objectives in a professionally tailored manner, perfectly structured from start to finish to match those important dates in your calendar with style, meeting your every need from both an investment and consumption prespeftives. Use your investment gains to pay for your next vintage magnum, or let us surprise a loved one with a gift they will never forget.
Geneva Capital Management benefits from:
One of the largest inventories of old and rare wines in the world.
Featuring most of the major Bordeaux wines from any significant vintage.
Vintage Port selection spanning the years from 1900 to 2003, with all the major houses represented.
Unparalleled Bordeaux futures service, with some of the largest allocations of the most sought-after wines.
How to invest in wines?
The very essence of a passion asset, investing directly in a bottle or a case of wine for safekeeping in your own possession can sometimes prove the most straightforward and effective method of getting involved with fine wine investments. This method also provides interesting tax ownership and structuring advantages due to the easily transferable status of a case of wine.
Geneva Capital Management disposes over one of the largest wine storage capabilities in the region and stays at the forefront of the entire investment process into Wine Vintages, offering a full-scale service to our clients.
Geneva Capital - The ultimate En Primeur partner
What is En Primeur?
Commonly referred to as ‘wine futures’, En Primeur (EP) essentially refers to the process of buying wine whilst still in barrel, with bottling and physical delivery 2-3 years after the vintage release. Wines can be purchased in different size formats.
Key benefits of En Primeur?
Lowest price – EP typically offers the chance for collectors to get involved at the lowest market offer price.
Security of provenance – when purchasing wines EP, collectors have the added benefit of having wines delivered via the most direct route from the Château, ensuring absolute provenance.
Secondary market buying trend – traditionally, the secondary market buying trend is for physical stock. This allows collectors to take advantage of EP gains, with stocks that are easily liquidated after physical delivery.
Why Invest in En Primeur?
In recent years En Primeur is increasingly being bought for investment purposes. In general, one can secure better prices for En Primeur wines as they are virtually always cheaper than the price of the wine when it is bottled. With the clamour for good vintages, prices of En Primeur wines can increase rapidly, sometimes even double within a matter of weeks. It is a way to secure wines that are difficult to obtain and highly sought after once physical.