Liv-ex 100—a benchmark for the fine wine market—has eluded the roller coasters experienced by global equities, trading within a 2% range throughout 2018, according to a report by London-based Liv-ex released Thursday.
This is reassuring to wealthy investors, who have invested in top-quality wine in recent years to insulate their portfolio from market volatility. Fine wine—like other tangible assets, including gold, art and real estate, has—a low correlation with global equities and therefore is used as a safe haven for diversification.
Further, fine wine investment had a stronger return than global equities in 2018, according to the report. While the Liv-ex 100 gained a modest 0.22% year to date, the broader measure of the fine wine market—Lix-ex 1000—rose 10.2% to an all-time high, outperforming most of the global stock indices, such as FTSE 100, S&P 500, DAX, and Hong Kong’s Hang Seng.
The top performer is Burgundy, which has continued to thrive both in terms of market share and price performance.
Burgundy’s market share is just below 15%, up from 12.7% in 2017. It hit a record monthly high of 20.9% in November. Bordeaux still dominates the wine market, accounting for 59% of the market in 2018, but dropping from 68% in 2017.
In terms of prices, the 10 best performers from the Liv-ex 1000 all come from Burgundy, with Armand Rousseau and Domaine de la Romanée-Conti (known as DRC) appreciating 42.7% and 33.5% on average, respectively.
“The relative scarcity of wines at the top end, combined with growing demand, has particularly influenced the prices of Armand Rousseau and DRC,” the report said.
This year’s top performer is Armand Rousseau, Gevrey Chambertin Clos Saint-Jacques 2010, rising 194.8% year to date, followed by the same producer’s Chambertin 2010 (152.9%), and DRC Romanée Saint Vivant 2007 (132.9%).
In October, a 1945 bottle of Romanée Conti 1945 from Domaine de la Romanée-Conti sold for US$558,000 at a Sotheby’s auction in New York, becoming the most expensive wine ever sold at auction. It had a presale estimate of between US$22,000 and US$32,000.
Additionally, France’s Champagne region overtook Italy in 2018 to become the third most traded region by value, with its market share rising from 6% to 8%.
Liv-ex (London International Vintners Exchange) has more than 425 merchant members from 38 different countries. Exposure—the total value of bid and offers on the exchange—reached a record high of over £50 million (US$63 million) in October.