Knight Frank have just published a report which puts the magnifying glass on their Knight Frank Luxury Investment Index, and in particular at the top performers. In the 12 months, ending 31st March 2017, fine wine heads the table and has won a dramatic take-over of previous luxury assets top- performer, classic cars.
The value of the Knight Frank Fine Wine Icons rose by 24% in the 12 months to 31st March 2017, leaving classic cars, the next best performer at 6% looking decidedly sluggish compared to previous years. Over the longer terms of 5 and 10 years the pendulum swings back to the automobile assets but wine’s unprecedented 3-year down-turn 2011 – 2014 has a significant impact and over the longer term we expect this measure to swing wine’s way.
All markets have their cycles and whilst classic cars have seen a decrease in the volume and value of sales in the last 12 months, those in the sector would argue that this is beneficial for the long-term health of the market and its ability to attract new market entrants. Certainly, fine wine buyers have seen value recovery for those that bought at the 2011 market heights and, for those that invested in the last 3 years, a healthy return on investment.
Fine wine suffered its own equivalent period in the doldrums, between 2011 and 2014, but a steady recovery from Autumn 2015 saw a marked hike in performance with the UK Brexit vote mid-2016. Liv-ex tracked sustained growth across all its indices to April this year (14 months of consecutive growth in the case of the Liv-ex 1000), when the 2016 en primeurs campaign took off. May saw an uplift again and the view is there is still more value in the market, particularly in Bordeaux stocks which were hardest hit during the downturn.
The Knight Frank report compares asset performance across their luxury index classes over 1, 5 and 10 years and can be read in full here https://kfcontent.blob.core.windows.net/research/540/documents/en/knight-frank-luxury-investment-index-q1-2017-4749.pdf. It is a fascinating reminder of the fact that alternative assets can enhance portfolio performance as well as being the most interesting investments you could possibly own. In particular the strength of fine wine as an asset, which provides lower market entry price and certainly more liquidity.
For more information on the current best opportunities in the fine wine market call us now on 0203 384 2262