PASSION ASSET

Wine is a Passion Asset

In recent history the everyday investor is looking to diversify in to alternative investment classes due to record low interest rates and global economic uncertainty. The demand for these alternative investments and in particular tangible assets that have intrinsic value, where supply is limited, has never been more apparent.

These so called ‘Passion Assets’ which include fine wine, art, classic cars, coins, jewellery and antiques have outperformed almost every other sector since the global financial crisis more than ten years ago. They offer no income stream and their primary purpose is deemed to be a collectable asset. The unique qualities and limited supplies make passion assets a highly sought-after collectable, however their investment performance is difficult to ignore.

The Knight Frank Luxury Index tracks the performance of a theoretical basket of collectable asset classes and each asset class is weighted to reflect its relative importance and value within the basket. According to the Knight Frank wealth report of 2017, the index has shown significant growth across nearly every asset class over the past ten years, with the fine wine market showing growth of 192%, the second highest performer to classic cars which showed a 334% growth across the same period. As highlighted in the table below, the fine wine market has also generated consistent growth over 12 month time frames.  

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