The top 10 investment wines that returned 150pc in five years

The top 10 investment wines that returned 150pc in five years

LIVEX 5YR

The value of fine wines has risen by 20pc over the past year, with demand climbing as investors look for novel ways to diversify their portfolios.

Wine, stamps, coins and other collectibles are seen as being uncorrelated to the stock market, and so are desirable for those who want to insulate themselves from any crash in shares.

Far from buying a dusty bottles in old-fashioned shops, there are sophisticated trading platforms and other tools to help people to invest.

Most such investments can’t be held within an Isa and ideally require a degree of knowledge. But they are significantly more accessible than in the past.

Telegraph Money has taken a look at the best performing investment wines over the past year, using data from wine marketplace Liv-ex, which produces indices that track the wine market.

Over the past year, its Liv-ex 100 index of the most traded fine wines has risen by 20pc. It has not all been smooth sailing, however, and the index has risen by only 7pc over five years after a 2013 fall.

At the top end, performance has been dramatic.

The 10 best performing wines (see table) over the past five years have increased in value by an average of 150pc. The best performer, Petit Mouton 2011, has jumped by 165pc.

According to Liv-ex director Justin Gibbs, exchange rates have had an impact recently. The reduced value of sterling following the Brexit vote has led to increased buying of wine priced in pounds by overseas buyers, for whom the wine has become cheaper.

This has pushed the price of wine higher for British collectors.Increased demand from Asia has also driven prices up.

Simon Staples, sales director of fine wine at merchant Berry Bros & Rudd, which offers a fine wine trading platform, said: “Demand and interest in fine wine are growing around the world and supply of the top wines cannot increase – supply is limited.

“The best performing wines are great examples. They become increasingly unattainable over time as bottles are consumed, and fine wine matures and improves with age.”

Mr Staples said he expected to see an increase in demand for Bordeaux 2010 and “almost all” 2011 to 2015 Red Burgundy 1er and Grand Cru.

How can I invest in fine wine?

For those who feel confident enough in their knowledge of wine, there are a number of ways to invest. Wine is best viewed as a diversifier – only taking up a small part of an overall portfolio.

Buying wine ‘in bond’

Wines “in bond” are those that have not had duty or VAT paid on them yet, requiring them to be stored in HM Revenue & Customs approved warehouses.

Duty and VAT are payable only if you actually take delivery of the wine, at which point the VAT is calculated on the basis of the original price you paid rather than its current value.

If you sell the wine while it is still in bond, you won’t have to pay the taxes at all.

Buying wine stored in bond is a good way to ensure its provenance and the warehouses typically provide optimum storage conditions for wine.

According to Berry Bros & Rudd, wines stored in bond are more attractive to prospective buyers and brokers, who will usually pay the same price whether or not the wine has had duty or VAT paid on it.

It costs around £10 to £15 annually to have a 12-bottle case of wine stored in a bonded warehouse. Wines in bond can be bought online via various wine dealers, including Berry Bros, Lay & Wheeler and Corney & Barrow.

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