Champagne delivers healthy returns in wine investment market

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New research from Cult Wines, a specialist in fine wine investment management services, shows that a long-term 10 per cent allocation to Champagne should be part of any fine wine portfolio and is increasingly becoming an attractive source of returns.

According to the Champagne Investment Report, the Liv-ex Champagne 50 index has provided total returns of 47 per cent between 2014 – 2019. Champagne also performs well against the Italy 100, which has delivered a return of 39 per cent, and Liv-ex Bordeaux 500 which has risen 33 per cent in the same period.

Today’s research shows Champagne, which has long been characterised by regular and steady gains, has delivered positive returns of 7.8 per cent and 4.4 per cent respectively in 2018 and 2019. Compared to gold as a traditional solid and ‘safe’ diversification, the index outperformed this asset over 5 years at 47 per cent compared to 25 per cent.

Salon remains the top ranked Champagne brand due to its carefully selected vintage release and limited production volume.  It has led the region over the last 10 years with a total gain of 222 per cent, while other investment-grade Champagne also performed favourably. The second highest performer is Taittinger which delivered an impressive total return of 191.4 per cent, while Bollinger Grande Année, ranked third, offered a cumulative 10-year return of 131 per cent.

Tom Gearing, Cult Wines Co-Founder and Managing Director, says: “Our optimism for the Champagne region is driven by its long-term stability and higher risk-adjusted returns when compared with other regions of the market. The current fine wine market environment calls for a more balanced portfolio, and the merits of diversification found in Champagne support our view for a long-term 10 per cent allocation to Champagne. 

“As we enter 2020, we expect to see a continuation of the increasing appetite for Champagne. The celebratory nature of Champagne, combined with strong restaurant presence and better production capacity, makes it a unique offering in the fine wine market.

“With Champagne enjoying consistent returns and growing popularity, the number of unique Champagnes trading on Liv-ex has multiplied. With muted growth of the broader market continuing to weigh on risk appetite, Champagne plays an important role in building portfolio resilience with steady returns and low volatility.”