There was no hangover for wine investors during the pandemic, with Bordeaux bottles proving a better bet than hiding money in a Hermés handbag or rare whiskey.
Collector’s interest has helped wine push the competition from watches and cars to the top of the Knight Frank Luxury Investment Index, with premium wine prices rising 13% over the course of the year. year until the end of June. This performance beat watches and cars in second and third place with gains of 5% and 4%.
With the pandemic creating turbulent conditions for investors to navigate, index editor Andrew Shirley said a drop in the value of scarce Hermes scotch bottles and handbags meant they had given up. their place at the top of the ranking.
“Wine is the leader in the 12 months to the end of June 2021 with prices rising 13% and 119% over a 10-year period,” said Shirley.
Alternative assets such as paints, wine, and vintage cars appeal to deep-pocketed investors who are able to turn their passions and private hobbies into potentially lucrative investments. However, they can also be risky as they are more difficult to sell than shares of publicly traded companies.
Nick Martin, managing director of the online wine collection platform Wine Owners, said wine prices “aren’t going crazy” but are increasing: “There is no sign of excessive exuberance. He pointed to the success of the Bordeaux wine market as collectors labeled vintages, such as 1996 and 2000, as “excellent value for money”.
In recent years, the Hermés Birkin handbag, named after actress and singer Jane Birkin, has been touted as a wise investment. The French luxury house no longer maintains a waiting list for Birkins and only manufactures them for “friends”, creating a huge resale market. Two years ago, a Birkin sold for £ 162,500 at an auction in London.
The enduring appeal of high-end watches has been exemplified by the recent success of companies such as Watches of Switzerland, which has seen its share price rise by over 200% over the past year. The success of the biggest seller of Rolex and Omega watches in the UK comes despite an average spend of around £ 6,000.
The classic car market is also healthy, according to the index, with a selection of some of the rarest and most collectable vehicles in the world up 4%. However, most of the interest came from experienced collectors and dealers.