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Why Fine Wine Outperforms Traditional Markets Over the Long Term.

  • daniel710549
  • Sep 3
  • 2 min read

As an investor in the United Kingdom, you may already be familiar with the volatility of equity markets such as the FTSE 100. But did you know that fine wine, as tracked by Liv-ex, regularly outperforms these markets over both five and ten year horizons? Let us explore why this unique tangible asset continues to shine.


Strong Long Term Growth Backed by Liv-ex Data: According to Liv-ex data comparing performance from 2004 to mid 2024:

  • Liv-ex 1000 Index (all fine wine): delivered a total return of 288.3%

  • Liv-ex 100 Index: up 272.5% over the same period

  • By contrast, the FTSE 100 posted only an 86.8% return—far below fine wine

That equates to average annual growth significantly above what traditional markets typically offer.


Consistent Five Year and Ten Year Returns with Lower Volatility: The Liv-ex data shows:

  • Across every five year period between 2004 and 2024, a diversified fine wine portfolio has delivered positive gross returns, with an average annualised return of 8.76%

  • Even during market corrections, long term performance remains robust.


Low Volatility, Defensive Asset During Market Turbulence: Studies highlight that fine wine offers superior stability and diversification:

  • The Liv-ex 100 recorded 14% annual growth over 15 years, regularly outperforming the FTSE 100 and the S and P 500—not only in returns but also in relative stability

  • During the global financial crisis in 2008 to 2010, while the FTSE All Shares fell nearly 25%, the Liv-ex 1000 held steady, showing only minimal decline compared to major equity markets and gold.


Why Fine Wine Delivers Where Equities Often Fall Short: Fine wine benefits from structural advantages that continue to strengthen long term performance:

  • Finite supply: Only a small proportion of wines qualify as investment grade, increasing scarcity over time

  • Global demand: Strong interest from Asia, North America, the Middle East and Europe drives value across rare Burgundy, Bordeaux, Champagne and more

  • Low correlation with equities: Fine wine behaves independently from wider financial markets, improving portfolio resilience

  • Tangible asset: Unlike shares, fine wine has physical value—something you can hold, store and enjoy

  • Tax efficiency: When held in bond, profits are usually exempt from VAT and may avoid capital gains tax—especially relevant in the United Kingdom


A cellar filled with neatly arranged fine wine barrels, aging to perfection in a dimly lit, serene environment.
A cellar filled with neatly arranged fine wine barrels, aging to perfection in a dimly lit, serene environment.

Summary Table: Performance Comparison:

Asset Type

15 Year Return

10 Year Outlook

Volatility

Fine Wine (Liv-ex)

272–288%

Avg. 8.8% p.a.

Low, stable returns

FTSE 100

86.8%

—

Higher volatility

Conclusion: For investors in the United Kingdom seeking diversification, appreciation and stability, fine wine stands out as a compelling alternative asset. With consistent outperformance compared with the FTSE over five to fifteen year periods, lower volatility during downturns, and structural advantages from scarcity to tax benefits, it offers unique long term potential.

If you are considering when and how to enter the fine wine market, the current climate presents an excellent opportunity. I would be pleased to guide you in building a balanced and high quality fine wine portfolio. Follow for more reasons why Fine Wine outperforms traditional markets.


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