Sergey Glekov
Senior financial analyst
The Alti Wine Exchange Indexes are a family of equal weighted indexes which trace price performance of fine and rare wines and shows equal weighted average returns on them. The indexes are subdivided by most important wine countries:
- Argentina
- Australia
- US (California)
- Chile
- France
- Germany
- Italy
- Portugal
- South Africa
- Spain
If in 2021, the stock market and wine investment market showed a solid performance, the last year was completely different for stock investors. In 2022, inflation set in at higher levels than the financial markets or central banks expected. A series of aggressive rate hikes from the Federal Reserve caused increased volatility in markets and weighed on investor sentiment throughout the year. Together with geopolitical concerns and volatile economic data, Wall Street has experienced the worst year since 2008. S&P 500 finishes 2022 down nearly 20%.
The good news for wine investors is that fine wines proved its stability in the face of increasingly severe headwinds. Fine wines confirmed its status of inherently low volatility investment which gives to them substantial advantages over stocks or bonds especially in turbulent economic times.
The AWE Wine Indexes remained resilient in 2022, its demand and price have remained relatively stable. Some wine indexes have even demonstrated double digit performance. Among leaders of 2022 are Portuguese, South African and Argentinian Wine indexes. Besides, the French Wine Indexes also saw a positive trend, and added almost 12% mainly driven by strong performance of Burgundy wines.
The outlook for 2023 is uncertain as no-one knows how far interest rates will need to rise to quell inflation. Despite a recent stock rally, stock market will likely remain volatile in 2023.
In conclusion, 2023 will be probably also a challenging year for the fine wine industry, but fine wine will remain a sought-after asset for investors looking for inflationary hedge and stability in a volatile market.
The AWE Wine Indexes: June 2016 – December 2022
