Fine Wine matches the rallying S&P 500

  • Since 2003 the Fine Wine 50 and Fine Wine 1000 have performed in line with the S&P 500.
  • Equities tend to outperform fine wine in the short term…
  • …but one can’t drink the performance of the S&P 500.

If you had put £100 into the Liv-ex Fine Wine 50 or the Liv-ex Fine Wine 1000 in December 2003 and put an equal amount into the S&P 500, where do you think you would stand today?

The answer, which will surprise some, is relatively close.

Château Equity

To the close of June 2021, the Fine Wine 50 and Fine Wine 1000 are up 263% and 276% respectively, and the S&P 500 is just a touch higher at 286.5%, thanks to strong rally over the past year.

Despite the returns, you can’t crack open a bottle of the S&P 500.

In the short term, which is understandably not in fine wine’s favour, due to the market dynamics of supply and demand, major equities have outperformed. This has not been without a much larger degree of risk and volatility, however, highlighted in our most recent post on the topic.

Time splitters

Fine wine’s strength is in its ability to test time.

Neal Martin recently gave Lafite Rothschild 2020 a drinking window out to 2070. If the Liv-ex 1000, of which Lafite Rothschild is member, can rise 276% in 18 years, then where will it be in another 49 years when, those that were patient, open their bottle of Lafite Rothschild 2020?

If you’d like to understand more about fine wine as an investment then our latest report, “Introduction to fine wine investment”, outlines how investing in fine wine works in practice and the key trends that have defined the market over the past 20 years.