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.
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.
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.