Super Tuscan Investment – Style

While some spend money on wine, others can earn up to 24% per annum on it, according to the consulting company Knight Frank. In the classic case of investing, tasting Burgundy and Super Tuscan will have to be replaced by finding out their quotes and communicating with foreign merchants, but there are more modern methods – through smartphone applications.

If you know a lot about good wine, you can make good money on it. Even in a turbulent 2022, collectible drinks added 10% in price, according to The Wealth Report, published by the international consulting company Knight Frank. In quieter years there were earnings and cleaner. In 2016, Knight Frank stated that wine investors earned 24% per annum – 1.5 times more (at that time) than investors who bought stocks from the S&P 500 list.

The mood of the wine industry adds optimism to investors. According to Liquid Icons, 90% of industry players expect positive changes in 2023, meaning the growth of consumer demand and investment volumes (about 1 thousand industry representatives were surveyed). 59% of bankers and consultants surveyed by Knight Frank suggested that art will occupy the top line of return among non-traditional financial instruments in 2023, and 39% of respondents noted wine as a promising investment.

How can I do that? No cellar tastings: investment wines are traded through wine merchants. The role of the central trading platform is performed by the London Liv-ex (The London International Vintners Exchange): wine has been traded here since 2000, now 630 specialized wine trading companies operate on it. The reference for the market is the Liv-ex Fine Wine 100 index, which reflects the dynamics of prices for a hundred positions from eight regions – mainly from Bordeaux, but also from Burgundy, Tuscany, etc. The index is calculated as the average value between the highest and lowest offer among the largest pool of wine merchants and is expressed in the price of an average box of 12 bottles.

In February 2023, the index value exceeded 415, and over the past 20 years it has grown by as much as 270%. Liv-ex’s annual report emphasized that good wines remain a “stable” investment even during a period of market turbulence, with Burgundy now the driver of growth, which is seriously pressed by Champagne.

Only legal entities can trade on Liv-ex. Private traders can pay attention to the more democratic Cavex exchange or act through British merchants and investment funds. In the latter case, you need to have at least 10 thousand – this is the minimum price of an entrance ticket to the market, for example, from the Wine Investment Fund broker. The general director of the Russian company Simple, Maxim Kashirin, cites the example of the English merchant Berry Bros., which has existed since 1698. & Rudd, offering, among other things, services for the storage and sale of wine. Negotiators will offer to invest in blue chips like Bordeaux grand cru, as well as promising Californian and Australian wines.

There are more modern methods of investing: smartphone apps like Vinovest or Oeno Futures. Simple – Fine & Rare Wine has also developed its own application, it contains about 500 items. Investors will also be offered Bordeaux blue chips (such as Chateau Petrus or Lafite Rotschild) and top Burgundy wines (Domaine Lalou Bize Leroy). There are also classic Super Tuscans – Sassicaia from San Guido, price fluctuations for which are taken into account by Liv-ex Fine Wine 100. So, in February 2023, Sassicaia 2019, which added about 3% over the month, became one of the growth factors of the index.

Investments are promising not only in the top-end drinks. In Bordeaux, according to some estimates, about 100 types of investment-grade wines are produced, about 50 more types are produced by Burgundy, about 30 – by the Rhone Valley. The more representative Liv-ex Fine Wine 1000 index helps to navigate them.

Simple has been promoting rare wines for more than a decade, and therefore is ready to help build a collection in the application with the help of a personal manager and experts. The latter advise 80–90% of the portfolio to be composed of wines that are not ashamed to be inherited, but to experiment with the remaining 10–20%. By the way, the “experimental” part of the collection is not so sorry to uncork.

Alexander Voronov