Investing in “passion assets”: trust (also) in wine, with a low risk/high return

Investments in so-called “passion assets” such as art, watches, jewellery, vintage cars, and wine, now account for 19% of total investor portfolio value. They invest their budget mainly on traditional assets like stocks, bonds, and pension funds (31%), real estate (26%), and other alternative investments like commodities, hedge funds, and so on (24%). Yet, already more than 1 investor in 3 invests in his passions, and wine appears to have promising prospects in this regard. According to the findings of a survey conducted by Fladgate, a London law consultancy firm, which interviewed 300 investors (roughly evenly divided by investment ranges, up to 250,000 pounds, between 250,000 and 1 million pounds, and those 1 million pounds) and 170 advisors. Looking at wine, 34% of investors are already investing in it, trailing jewellery and watches (63%) and art (35%), but ahead of cars (32%), whisky (29%), and NFT (25%), which have dominated the collecting news in recent years.
Furthermore, it is revealed that 26% of collectors have previously invested in wine, but that 39% have never done so. But the audience of wine investors is expected to grow, owing to the fact that, over the next five years, the wine sector will be a low-risk, high-performance sector for over 50% of advisors and a low-risk, high-performance sector for over 43%; and in fact, according to advisors, over the next five years, 26% of their clients will definitely invest in wine, 49% will most likely invest, and only one investor in four will not consider this opportunity.
An interesting prospect, and one of long-term confidence, at least for the world’s largest wine labels, especially in light of a negative year for wine investments, following years of tumultuous growth, as evidenced by the performance of the Liv-Ex indices, the reference platform on the subject, which has recorded robust losses since the beginning of the year. For the Liv-Ex 100, the platform’s leading index, the September data stops at -10.3% from the beginning of 2023, and -11.3% in the last 12 months (even if the data remains positive, at +19 %, over the last 5 years, and at +3.3%, over the last 2 years).