Fine Wine's Historic Performance Over Time

You’ve only got to look at returns offered by top producers over the past 10-15 years to see what a smart choice fine wine investment is for those seeking steady capital growth with minimal volatility. If you’re weighing up whether to diversify your portfolio into fine wine, then our guide to wine’s historic performance over time should help to convince you of its merits

Wine is a long game that requires patience and tenacity. From waiting for new vines to mature, to keeping a close eye on sleeping stock resting in barrels, the process from grape to glass takes time. The same can be said for wine investment, which is a pursuit that rewards patience and requires long-term thinking. For those willing to put the time and effort in, fine wine can prove a lucrative investment choice and a tax-efficient means of diversifying an investment portfolio, delivering strong and stable growth over the long term.

Broadly speaking, the longer you’re able to keep hold of your wine investments, the larger returns they will provide over time. Take Bordeaux for example, which, on average, has provided returns to Bordeaux Index clients of 27% over the last five years, 84% over the last decade and 174% over the past 15 years.

Looking to more recent additions to the wine investment scene, the returns over time become even more marked, with Burgundy proving itself as a good investment, with five-year returns at Bordeaux Index of 91%, 10-year gains of 237%, and returns over the past 15 years of a whopping 382%. Insatiable demand for grand cru Burgundy over the past decade has driven prices for the top wines into the stratosphere, meaning significant returns for those lucky enough to be able to invest in the most lusted after labels and play in the big league.

Following a similar pattern to Burgundy, Champagne provided five-year returns at Bordeaux Index of 132%, 10-year gains of 245% and 15-year returns of 249%.

Italy on top

The appeal of choosing fine wine as an investment is that it offers a win-win scenario. Investment grade wine delivers consistent returns over time that compare favourably with other mainstream assets, only with significantly less volatility, meaning investors can increase their capital with very little risk.

While Bordeaux used to rule the wine investment roost, over the last five years the fine wine market has broadened significantly to incorporate wines from Burgundy, Champagne, the Rhône, California and beyond, making the playing field broader and more exciting than ever, and giving a bigger pool of investors greater access to the wines that are driving the market.

The Super Tuscans – particularly Sassicaia and Tignanello – have emerged as one of the greatest fine wine investment success stories over the last five years, storming onto the scene and heavily populating Bordeaux Index’s top 10 best-performing wines since 2018.

While the 2002 vintage of revered blanc de blancs Champagne Salon tops the list (see below), offering investors five-year returns of 172%, Sassicaia took the second, sixth and tenth spot in the line-up with its 2015, 2013 and 2014 vintages, which have given returns of 126%, 103% and 99% respectively. Tignanello, meanwhile, accounted for four of the wines in the top ten, in third (2014), fifth (2013), seventh (2010) and eighth (2012) place, delivering returns of 113%, 105% and 103% over the last five years.

Proving how significantly the fine wine investment market has shifted of late, the entire top ten was formed of Super Tuscans and prestige cuvée Champagnes, with Krug 2000 and Louis Roederer Cristal 2009 making an appearance in fourth and ninth place respectively. Wind the clock back a decade and it was a very different picture. When it comes to Bordeaux Index’s ten top-performing wines over the last ten years, the list is entirely made up of classed growth Bordeaux, with the 2001 vintage of Cheval Blanc out front with returns of 259%.

The 1995 and 1998 vintages of the celebrated wine from Saint-Emilion also made an appearance in the list, taking the fourth and fifth spot with 10-year returns of 172% and 168% respectively. Making up the remainder of the top five were La-Mission-Haut-Brion 1998, which scooped second place with returns of 251%, while Cos d’Estournel 2000 came third due to its 10-year returns of 195%.

The long game

A similar picture emerged when considering which wines have offered the best returns at Bordeaux Index over the past 15 years. The line-up solely features big name Bordeaux brands, with the 2001 vintage La Mission Haut-Brion leading the pack on 15-year returns of 311%, while the 1998 vintage from the château took the tenth place with returns of 192%. Right Bank powerhouse Petrus made a couple of cameos on the list, with the 2001 vintage nabbing second place due to its healthy returns of 282%, while the 1995 vintage has also performed well over time, rewarding investors with 15-year returns of 198%.

First growth Mouton Rothschild scored a hat-trick with three entries in the top 10, in third, fourth and eighth place for its 2000, 2004 and 1999 vintages, which delivered respective returns of 251%, 216% and 194%. Fellow first growth Haut-Brion, meanwhile, took the sixth spot, offering returns of 200% since 2008.

Bull and bear markets

Fine wine has largely held firm in the face of significant global events, not only retaining but growing its value thus proving itself an inflation-proof safe haven for capital. Over the last five years fine wine has outperformed every other asset classes including gold, equities, the S&P 500 and the FTSE 100. While other assets suffered significant losses during the pandemic, fine wine grew.

There has also been a fair share of bull runs in the fine wine market over the last 20 years, fuelled by the success of the 2005, 2009 and 2010 vintages in Bordeaux, and the insatiable Chinese interest in the top wines from the region prior to the government crackdown on gifting and the inflated 2010 Bordeaux En Primeur release prices in the spring of 2011.

As a tangible asset whose performance isn’t directly correlated to other financial markets, fine wine is able to grow its value in spite of rising inflation. With inflation at its highest level in decades, diversifying your investment portfolio into wine is a savvy move offering a trusted means to hedge inflation, grow value and protect capital.

Supply-demand dynamics

Much of wine’s success as an investment comes down to simple supply-demand dynamics. Less than 1% of the wine produced around the world is considered ‘investment-grade’ due to its quality, brand equity, limited supply, vintage appeal and ageing potential. There is a finite supply of these investment grade wines to satisfy increasing global demand among a growing pool of investors and high net worth individuals keen to get into the game.

Over time, as the wines disappear from the primary market and bottles are uncorked, these top tier wines become even more valuable due to their increasing rarity. Climate change and increasingly erratic weather patterns are also impacting on the supply of many blue-chip names across vintages, with less wines available to collectors due to reduced yields.

Burgundy shortages, reduced collector allocations and price hikes are leading to a perfect storm of higher buyer demand for less available wine, which is pushing prices up. As market momentum continues, there is a sense that an increased focus on lower production – both that seen already and in the future due to climate change – could pour fuel on the fire, as the highest price rises in the fine wine sphere in recent years have come from the marginal climates of Burgundy and Champagne.

Low risk, high returns

Fine wine has emerged as a low risk, high return unicorn of the investment world that offers consistent long-term growth with minimal volatility. Over time it has proved its ability to maintain its value during market crashes, protecting portfolios against loss during times of recession. Fine wine also has a low downside risk, meaning it's unlikely that your investment portfolio will crash suddenly or unexpectedly and lose significant value.

Whether you’ve got your eye on some parcels of grand cru Burgundy, are seeking to grow your prestige cuvée collection, or are keen to broaden your Bordeaux portfolio, whichever region you choose to invest in, if you’ve got the willpower to keep hold of your cases for five years or more, then your patience will be rewarded with healthy returns.

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