When you compare the performance of staple equity and fine wine investments such as Rolls Royce and Screaming Eagle the results speak for themselves. Here’s why every investor should be considering diversifying their portfolio with fine wine:
Performance comparison between Rolls Royce, IAG and Screaming Eagle:
|Blue-chip investment||5-year Performance||1 year Performance|
|Rolls Royce||-53.6% fall||-59.86% fall|
|IAG (parent British Airways)||-65.77% fall||-61.66% fall|
|Screaming Eagle 2012||+ 48% growth||+2.6% growth|
Data at 11.11.2020
Pfizer administered a shot in the arm for equities this week with the much hoped for announcement of a Covid vaccine passing the initial tests with flying colours. Fine wine investors may have enjoyed a quick double whammy as afflicted share portfolios saw some micro-term reprieve, however it didn’t last long.
Over a measure of one week we saw equities bounce with the news the world has been waiting for and blue-chip stocks illustrate the impact of the current volatility. Rolls Royce was up 27.38% and IAG 37.84% over the week leading to the morning of 11th November. However, there’s no stability or predictability about equities right now. Rolls Royce’s share price actually ended the day down 8.02% as investors took advantage of gains made over the previous 8 days of growth.
London Stocks fell early on the morning of the 12th November and the FTSE 100 stood at a loss of 0.9% by 8.30am. Some of the loss may also be down to the markets factoring in the reality of the progress that still needs to be made with the vaccine trials and the challenges of a global vaccination roll-out.
Meanwhile, the Screaming Eagle 2012 price continues to maintain steady growth, unaffected by Covid news as it has been throughout the devastating developments both for humanity and global economies during the pandemic to date. Top market movers on Liv-ex during October were led by Burgundy’s iconic Domaine de la Romanée Conti wines with DRC Echezaux 2012 seeing 9.8% growth in the month.
During the Coronavirus epidemic fine wine has remained stable and demand is on a high. Liv-ex reported that October 2020 saw the highest value of trade in a single month on the exchange since July 2011, up 31.3% year on year and 17.6% growth on September.
The key Liv-ex 100 benchmark grew 1.2% month-on-month. It is tracking 3.8% for the year to the end 31st October 2020, compared to FTSE 100’s -21.6% loss.
We comment regularly on the fact that fine wine’s stable performance delivers optimum value over the long term, acting as a hedge against volatile financial markets. This is illustrated perfectly when we compare blue-chip wine and equity investment over a five-year period and during a global pandemic right now.