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At IWM we promote fine wine and fine wine education as experiences to be enjoyed by friends and family alike.  While the strategy employed throughout the process of evaluating and purchasing fine wine may not take into account the feasibility of fine wine as an investment vehicle, the historical price performance of this asset class has been undeniable. The wines carried by IWM represent some of the most valuable and in demand commodities on the market, with a proven draw at auction houses across the globe.  With guaranteed provenance, wine offered through IWM will appreciate significantly over time. 

As a “hard asset,” uncorrelated to financial markets, fine wine naturally appreciates in value over time as it approaches optimal drinkability. Wines are consumed, stock levels decrease and the rarity value drives demand, and prices, higher. The fine wine market has, in recent years, witnessed a simultaneous growth in demand and reduction in supply, as crop yields for many European vineyards focus on increasing quality and decreasing quantity¹. This dynamic has produced the conditions for attractive investment returns over past decades and bodes well for the coming years. Over the last 25 years, fine wines have proven to be one of the most consistently stable, high yielding, low risk investments in the world. Even during periods of market weakness, wine prices tend to move sideways instead of decreasing, which denotes a healthy consolidation of fine wine value¹.

Above, the rolling 5-year average annual returns for the “Fine Wine 50 Index2,” bottomed out at 3% post- 9/11 and has never dipped into negative territory. Over those 100 periods of positive gains, the DJI had 90 positive periods, the FTSE 81, Hang Seng 76 and Gold 57.

Italian Fine Wine Investment
Italian fine wine indices have consistently outperformed broader financial market indices, while maintaining a low volatility of returns. The Italian wine market has not been impacted by the speculation evident in the rapid appreciation of the First Growth Bordeaux market. Many industry professionals view Italian fine wines as undervalued relative to their counterparts in France.  A comparison of the “Italian Index,” the S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite, illustrates an impressive performance by the “Italian Index.” 

Investment Security
Wine is purchased from sources with strict quality and provenance guidelines and is stored in temperature controlled storage facilities.

Disclaimer
Past performance should not be construed as a guarantee of future performance and the value of such an investment may fall as well as rise. Care should be taken in making an investment of this nature.

1 Financial Times “Wine Investment”, May 20, 2008