The case for fine wine as an investment rests on two legs: absolute performance and low correlation to financial markets. Over the decade from 2014 to 2024, both held, though the decade was far from smooth, and the nuances matter enormously for how you think about building a position.
The headline numbers
The Liv-Ex 100, the professional benchmark for investment-grade fine wine, returned approximately 87% over the ten-year period to 31 December 2024, measured in GBP. Over the same period, the FTSE 100 total return index returned approximately 112%, the S&P 500 (in GBP-hedged terms) returned over 300%, and gold returned approximately 110%.
On the face of it, fine wine underperformed equities and matched gold. But the headline comparison obscures two things that matter: volatility and the investment timeline.
Volatility: the number most advisory firms ignore
The FTSE 100 experienced drawdowns of 32% in 2020 and 13% in 2022. The S&P 500's 2022 drawdown was 19.4%. During both periods, the Liv-Ex 100 held flat or continued to appreciate. The 2020 drawdown on Liv-Ex was approximately 3.5%, and it recovered within four months.
For an investor whose portfolio includes equities, bonds, and property, the value of fine wine is not simply its absolute return. It is the return it generates during the periods when everything else is falling. This is the diversification premium, and it has a real monetary value that headline return comparisons do not capture.
The Liv-Ex 100 drawdown in 2020 was approximately 3.5%, recovering in four months. The FTSE 100 fell 32% in the same period.
The 2023–2024 correction
Fine wine's ten-year comparison is complicated by a significant correction that began in late 2022 and continued through 2024. The Liv-Ex 100 fell approximately 20% from its mid-2022 peak, driven primarily by two factors: Bordeaux price normalisation following an exceptional run during 2020–2022, and a softening of Asian demand, particularly from Hong Kong, which had been a primary engine of fine wine appreciation in the prior decade.
This correction was uncomfortable for investors who entered at peak 2021–2022 pricing. It was, however, expected by experienced market participants. Bordeaux First Growth prices had appreciated 60% in the two years from January 2020 to January 2022, the pullback was a reversion, not a structural break.
What active management achieved
Clients whose portfolios were actively managed through the 2023 correction fared materially better than the Liv-Ex index suggests. Portfolios weighted toward Burgundy, which saw far less correction than Bordeaux, and toward the 2019 and 2022 vintages (released at conservative pricing relative to quality) preserved value through a period when the headline index declined.
Correlation: the data since 2014
The 12-month rolling correlation between the Liv-Ex 100 and the FTSE 100 has averaged approximately 0.12 over the ten-year period. In plain terms: movements in the UK equity market explain roughly 1.4% of the variance in fine wine prices. The drivers of fine wine returns (vintage quality, critic scores, physical consumption, Asian demand cycles) are almost entirely disconnected from corporate earnings and interest rate cycles.
What this means in practice
For a typical high-net-worth investor with £500,000 in equities and £200,000 in property, adding £75,000 in fine wine reduces portfolio volatility without meaningfully impairing expected returns. The optimal allocation in academic portfolio construction studies sits between 5% and 15% of investable assets. Below 5%, the diversification effect is too small to be meaningful. Above 15%, the illiquidity premium becomes a drag during rebalancing.
The ten-year comparison, read carefully, is not an argument for replacing equities with wine. It is an argument for including wine alongside equities, and for understanding that the return profile you are buying is not identical to any other asset class in a portfolio.