Is Wine a Good Investment? The Honest Return Numbers
Updated
Fine wine has returned 4.1% a year in real terms since 1900, after storage and insurance, according to Dimson, Rousseau and Spaenjers. Knight Frank's April report still had the market a quarter below its 2022 peak. Both numbers are true, and any answer that hands you one without the other is a sales page.
Is wine a good investment? It has been a real asset with a below-equity return and above-equity swings, and it is four years into a drawdown. Elroy Dimson, Peter Rousseau and Christophe Spaenjers, in The Price of Wine, put the annualised real return on Bordeaux first growths at 4.1% between 1900 and 2012, net of storage and insurance, against 5.2% for British equities and 1.5% for government bonds. The standard deviation of those real wine returns was 26.3%, above the 19.8% they record for equities. Knight Frank's 2026 Wealth Report has the Liv-ex Fine Wine 100 down 2.5% in calendar 2025 and almost 25% below its 2022 peak. So: a gilt-beating, equity-lagging real return, bought with equity-sized volatility, a 25% cost to get in at Sotheby's, and no dividend to pay you for the wait.
Has fine wine actually made money?
Over 113 years, yes, and by less than shares. Dimson, Rousseau and Spaenjers hand-collected 36,271 prices for Haut-Brion, Lafite-Rothschild, Latour, Margaux and Mouton-Rothschild going back to 1899, collapsed them into 9,492 observations, and ran a value-weighted arithmetic repeat-sales regression. Their headline: a geometric average real return of 5.3% between 1900 and 2012, cut to 4.1% once storage and insurance are deducted. In nominal terms that is 8.2% a year, according to Dimson, Rousseau and Spaenjers.
Set against the same period, the picture is unflattering but not damning:
| Asset, 1900 to 2012 | Real return p.a. | Standard deviation | Worst single year |
|---|---|---|---|
| Wine (net of storage and insurance) | 4.1% | 26.3% | -37.1% in 1949 |
| British equities | 5.2% | 19.8% | -57.1% in 1974 |
| Government bonds | 1.5% | 13.7% | -30.7% in 1974 |
| Art (Great Britain) | 2.4% | 12.4% | -29.7% in 1915 |
| Stamps (Great Britain) | 2.8% | 12.3% | -19.2% in 1915 |
Wine beat bonds, art and stamps. It lost to equities while carrying more year-to-year variation than equities did, though the authors note that stripping out the war years pulls wine's standard deviation down to 20.3%, close to the 19.8% for shares. The storage deduction is not a rounding error either: they price wine insurance at close to 0.5% of collection value a year, citing Meltzer, and their storage estimates run from 0.94% of a case's value in 1940 down to 0.23% by 2000.
One line in that paper matters more than the return figure. Dimson, Rousseau and Spaenjers describe their own result as an upper bound: "The returns on red First Growths reported in this paper should therefore probably be considered as an upper bound on the long-term investment performance of wine more generally." They tested it. Over 1972 to 2012, Château d'Yquem returned 4.8% a year against 6.9% for the first-growth index, and five vintage ports traded at Christie's between 2010 and 2012 averaged 6.0%, according to Dimson, Rousseau and Spaenjers. Nobody publishes an index of the châteaux that stopped being collected.
Which years lost money?
Right now, most of them. This is Liv-ex's published index board on 7 August 2026, and every index on it is negative over two years.
| Liv-ex index | Level | 1 year | 2 years | 5 years |
|---|---|---|---|---|
| Fine Wine 50 (first growths) | 289.7 | +1.2% | -10.0% | -22.4% |
| Fine Wine 100 | 320.8 | +3.3% | -6.8% | -7.4% |
| Fine Wine 1000 | 350.7 | +1.2% | -9.0% | -7.9% |
| Bordeaux 500 | 275.2 | -0.4% | -12.3% | -18.3% |
| Bordeaux Legends 40 | 359.4 | +0.1% | -8.2% | -12.1% |
| Burgundy 150 | 611.6 | +1.9% | -9.1% | +3.1% |
| Champagne 50 | 500.7 | +2.6% | -8.4% | +8.7% |
| Rhone 100 | 174.6 | +4.6% | -2.7% | -18.3% |
| Italy 100 | 350.3 | +2.9% | -4.2% | +4.6% |
| California 50 | 299.7 | +2.1% | -9.6% | -7.0% |
| Rest of the World 60 | 272.0 | +0.4% | -9.7% | -11.7% |
| Port 50 | 151.4 | +1.7% | -2.1% | -7.7% |
According to Liv-ex's index board, three of the twelve are positive over five years. Nine are not. A buyer who put money into first growths in 2021 is down 22.4% before costs, before tax and before storage. Liv-ex's own Q1 2026 note says its "indices showed stability in Q1, albeit posting their first declines since last August in March", which is what the bottom of a cycle looks like from inside it and also what a pause on the way down looks like from inside it.
This is not the first time. Wine Spectator reported in January 2012 that the Liv-ex Fine Wine 100, then 95% Bordeaux, fell 15% in 2011, a 21% slide from its July high, with Lafite Rothschild 2008 and Mouton-Rothschild 2008 both down 43% across that year. Hong Kong's January auction take fell from $34.59 million in 2011 to $18.71 million in 2012, according to Wine Spectator. Concentrated, one-region bull markets have ended twice in fifteen years, and both times the wines that fell hardest were the ones the brochures had been recommending.
What is the index not telling you?
That the basket rolls forward and your cellar does not. Liv-ex lists the Fine Wine 50 as the ten most recent vintages of Lafite Rothschild, Margaux, Mouton Rothschild, Haut-Brion and Latour. The Burgundy 150 tracks the ten most recent physical vintages of fifteen red and white Burgundies, six of them Domaine de la Romanée-Conti labels; the Champagne 50 the recent vintages of the sixteen most actively traded champagnes, according to Liv-ex. Define a basket that way and the oldest vintage drops out every year as a new release comes in. The index stays permanently young. The case in your locker gets a year older and eventually stops being the wine the index is quoting.
The second thing an index hides is which window you looked through. In November 2024 the Advertising Standards Authority upheld a complaint against Vinverum Ltd over a Facebook ad headed "Transform Your Portfolio with Fine Wine Investment". The firm cited Liv-ex 1000 growth of 285.5% over the last 20 years. The ASA found that the same wines had risen 7% across the five-year period captured and fallen 18.8% in the last two, and ruled that the ad omitted material information: that wine investment was not regulated in the UK, and that investments could go down as well as up. Same index, same wines, three different stories depending on the start date.
Is fine wine uncorrelated with shares?
No, and the paper most often cited for the diversification pitch is the one that disproves it. Dimson, Rousseau and Spaenjers regress real wine returns on equity returns and get a market model beta of 0.44. Correct for the fact that wine prices are observed infrequently and lag the market, using Dimson's own 1979 adjustment, and the aggregated coefficient rises to 0.73. Strip out the 1941 to 1948 war distortion and it is 0.57. Their abstract puts it in seven words: "Wine and equity returns are positively correlated."
That makes intuitive sense. Fine wine is discretionary luxury consumption bought out of accumulated wealth. When the wealth effect goes, the bid goes. Treating wine as a hedge against an equity drawdown is asking the same buyer to behave two different ways in the same month.
What does it cost to buy, hold and sell?
More than most people model, and the entry cost alone is bigger than a typical year's return. Sotheby's lists a flat 24% buyer's premium on all hammer prices in its global wines and spirits sales, plus a 1% overhead premium, with none of the tiering that reduces the rate on expensive lots in other categories. Storage is small but relentless: WineSafe's published rate is £17.16 a year including VAT per twelve-bottle case, with insurance at replacement value included.
Work a case through it. A £1,000 hammer becomes £1,250 the moment it is yours. Five years of storage at £17.16 adds £85.80. You are £1,335.80 into a lot the room valued at £1,000, so the market has to rise 33.6% before you are level, and that is before you have paid anyone to sell it for you. Dimson and his co-authors ran the same arithmetic on 2012 rates, when Christie's London charged a 15% buyer's premium and seller's commission could reach 10%: "a seller may only receive about 75% of the amount that the winning bidder pays out." Buy-side rates have gone up since then, not down.
Duty and VAT sit outside that number if the wine stays in bond. Take it out to drink and they come back. Run your own case through the landed-cost calculator, and if the fee stack is new to you, the buyer's premium explainer sets out what each house charges on wine and where VAT lands on top.
Do you pay capital gains tax on wine in the UK?
Less often than the forums claim, and the relief is thinnest exactly where the money is. HMRC's Capital Gains Manual describes a wasting asset as one "with a predictable life not exceeding fifty years at the time when it was acquired", and wasting-asset chattels fall outside Capital Gains Tax. Bottled wines and spirits are chattels, so HMRC's CG76901 also confirms that disposals "for £6,000 or less will be exempt" under TCGA92/S262 whatever is in the bottle.
CG76901 then sets out where wine sits. Cheap table wine that may turn to vinegar is a wasting asset. Port and other fortified wines are "generally recognised to have a very long storage life" and are not. Fine wine sits between the two, and HMRC frames the test as "whether the wine has turned to vinegar or has merely matured", while noting that "most wine is drunk well below the age of 50 years".
Read that against your own investment case. The relief is written for wine that will be finished; the investment case is written on wine that will keep. A case of Pétrus has the strongest claim to durability and the weakest claim to the exemption, and vintage port has no claim at all. The capital gains tax on wine guide works through the UK, US, German and Irish positions on the same bottle.
Where does the return actually come from?
From a window, not from a rate, and the window closes long before most people sell. The same repeat-sales work maps price against age. The highest-quality wines "appreciate strongly while they are maturing over three to four decades after the vintage", at a geometric average of 3.0% over the first 25 years. For the lowest-quality vintages, appreciation over the first ten years is 0.5%, according to Dimson, Rousseau and Spaenjers. Then the curve flattens: once a high-quality wine is fully mature, the authors record that its increase in value between age 50 and 80 is "very limited", before an antique premium starts to lift it again much later.
So the compounding happens while the wine is still climbing towards its drinking peak. Hold a mature bottle for the plateau decades and you are paying storage to earn what the authors call a psychic return, which they put at at least 1% a year for wines substantially beyond maturity. That is a real return, but it is paid in pride of ownership, not in cash.
This is the most actionable finding in the literature and the one the brochures skip, because it says the money is made by buying young wine from a strong vintage and selling it before the plateau. Which vintage, and where it sits on that curve, is a data question: Bordeaux 2015 and a 1990 sit in different parts of the arc. The drink-now list shows where each vintage has reached.
Who are you buying from, and who protects you?
Nobody, in the regulatory sense, which is the risk that appears on no chart. The ASA's Vinverum ruling turned partly on the ad's failure to say that wine investment was not regulated in the UK, nor covered by the Financial Services Compensation Scheme or the Financial Ombudsman Service. That was November 2024. The Financial Conduct Authority had made the same point in May 2016, reporting that more than a quarter of over-55s who fell victim to investment fraud were scammed by an unauthorised firm selling unregulated products, "such as wine, diamonds and land", and that 13% of those questioned did not know such products carry no Ombudsman or FSCS protection.
Then there is the bottle itself. According to Wine Spectator, Rudy Kurniawan was sentenced in August 2014 to ten years in prison, $28.4 million in restitution to seven of his victims and forfeiture of $20 million in property, for manufacturing counterfeit rare wine at home. Wine Spectator reported that FBI agents searching his residence in 2012 found hundreds of bottles, corks, stamps and 18,000 fake wine labels. Every one of those bottles had a price, an auction record and, until the day it did not, a provenance. Condition and paperwork are the difference between an asset and a story: the condition and provenance guide is the inspection checklist, and wine investment risks walks the rest, from how long a case takes to turn back into cash to what single-producer concentration does to you.
So is wine a good investment for you?
It is a reasonable holding and a poor trade. The evidence supports four things and refuses to support a fifth.
- A long-run real return above bonds and below equities, at 4.1% a year net of storage and insurance over 113 years, on the best-performing wines of that century.
- Drawdowns you have to be able to sit through. According to Liv-ex, twelve out of twelve of its indices are negative over two years, and first growths are down 22.4% over five.
- A cost base that demands patience. 25% on the way in at Sotheby's, storage every year, commission on the way out.
- A tax position that favours ordinary wine over investment wine. According to HMRC, disposals of £6,000 or less are exempt whatever the bottle; beyond that the wasting-asset relief is weakest on the long-lived wines investors buy, and absent on port.
- Not a hedge. The correlation with equities is positive, at a beta of 0.44 rising to 0.73 once you correct for lagged pricing.
Buy wine you would be content to drink, in vintages that are still climbing, at prices you have checked against realised results rather than against a merchant's ask, and the arithmetic works out. Buy it because someone showed you a twenty-year chart, and you are the buyer that chart was drawn for. Where you buy matters too: the Bordeaux producer map covers the region carrying the worst two-year number on the board, while Knight Frank singles out Tuscany as the category that held up, with quality scores on par with Bordeaux and Burgundy at around half the price.
Know what the market did before someone calls to tell you what it will do
The number you need is the one with the bad years still in it. The live market index carries its complete history: every peak, every drawdown, how deep each one went and how long it took to come back, with no basket quietly rolled forward to flatter the line.
Members get it in the weekly email, alongside the wines whose price has moved further than their vintage or condition justifies. Join the list and you will be reading the market yourself, which is a cheaper education than the alternative.