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Fine Wine correction provides favourable entry point for investors

A correction in some of the world’s leading Fine Wine vintages has provided a favourable entry point for investors, according to Moncharm Wine Traders.

The appeal of fine wine investment lies in its scarcity and ever-increasing demand. With supply levels failing to keep up with the surge in interest from affluent collectors, the prices of the world’s most sought-after wines have skyrocketed. In 2018, a single bottle of Domaine Romanee Conti – de la Romanee Conti 1945 fetched a staggering $558,000 at a Christie’s auction, setting a new record for the most expensive bottle of wine ever sold.

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Since then, there has been a period of softness in leading vintages, which has taken some of the frothiness out of the market and created a possible entry point for long-term investors in the asset class.

The Liv-ex 1000, a broad measure of the fine wine market, is down 13.3% over the past year, but the longer-term trend remains intact. Within the broader index, there are leading component vintages, such as Mouton and Lafite Rothschild, that are changing hands at price well beneath previous highs.

Despite the rise of tech stocks and AI companies, Moncharm Wine Traders believes the so-called ‘passion investment’ remains a competitive investment option. The Liv-ex 1000 index has achieved annualised returns of 15.45% over the past twenty years.

According to Matthew Knight, head of private client sales at Moncharm Wine Traders, a London-based fine wine specialist, the recent cooling off period in 2023 has created an attractive buying opportunity for investors and collectors alike. “Investment-graded wines are offering a fantastic entry point for new collectors to establish their first holdings,” Knight said.

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“After all, nobody wants to buy at the top of the market. For investors with medium-long term time horizons, being able to buy some of the best vintages of the likes of Mouton and Lafite Rothschild at their current levels is a very attractive proposition indeed.”

For more about Fine Wine Investing, please see this free guide.

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