Latest / The High Net Worth Podcast with Fexingo: Wealth Management, Tax Strategy, and Affluent Finance / Why the Ultra-Wealthy Are Buying Up Vintage Wine as an Asset Class
Transcript
- Lucas: Luna, I’ve been looking at something that feels a little bit off the beaten path for wealth management but is actually showing up in more family office allocations than you might think. Luna: I’m intrigued. Are we talking art again, or something else? Lucas: Wine. Specifically, ultra-premium vintage wine as an asset class. We covered art a few episodes back, but wine has its own interesting dynamics. Luna: So we’re talking about bottles from Burgundy, Bordeaux, maybe some Champagne houses that trade like small-cap stocks? Lucas: Exactly right. And the numbers are compelling. The Liv-ex Fine Wine 100 index — that’s the leading benchmark — returned about 12 percent annually over the past decade. That’s competitive with the S&P 500 but with a much lower correlation to equities. Luna: Before we dive deep into that, can I just say — if you’re finding value in these conversations, and maybe they’ve helped you think about your own portfolio a little differently, there’s a small way to help keep this podcast ad-free and independent. Lucas: Yeah, and it’s genuinely the tiniest ask. If today’s episode was worth the price of a coffee to you, that’s the link — buy me a coffee dot com slash fexingo. Luna: No pressure at all. We just appreciate you listening. Okay, back to the vintage bottles. Lucas: So let’s get specific. The 2018 Burgundy vintage is a great case. Top producers like Domaine de la Romanée-Conti — a single bottle of their Grand Cru can cost upwards of $20,000. Luna: And those bottles have appreciated how much? Lucas: The 2018 vintage from DRC saw its market price jump over 40 percent between release in 2020 and early 2023. That’s not just hype — there’s genuine scarcity and quality. Luna: Forty percent in two years — that outperforms most real estate in prime markets. But isn’t that just a bubble in Burgundy? What about Bordeaux, which has been more subdued lately? Lucas: Fair point. Bordeaux has been flatter, especially the 2019 vintage. But that’s partly because Burgundy is more limited in production and has a cult following. The key takeaway is that wine investing isn’t monolithic. Luna: So how do ultra-high-net-worth families actually invest in wine? Are they buying cases and storing them in their own cellars? Lucas: Some do, but more commonly they use wine investment funds or managed accounts through specialized brokers. These services handle sourcing, provenance verification, storage in bonded warehouses, and eventual sale at auction. Luna: Provenance is huge — I’ve heard horror stories about counterfeit bottles, especially for DRC and first-growth Bordeaux. Lucas: Absolutely. That’s why reputable funds use blockchain tracking and only buy from trusted sources. Storage is also critical — wine needs constant temperature and humidity, and a single bad storage year can destroy a bottle’s value. Luna: What kind of allocation are family offices putting into wine? Is it a rounding error or a real position? Lucas: According to a 2025 survey by Campden Wealth, family offices with over $500 million in assets allocate roughly two to three percent of their portfolio to passion assets — wine, art, classic cars. Wine makes up about a quarter of that, so maybe half a percent to one percent of total assets. Luna: So it’s small but meaningful. And I guess it serves as an inflation hedge and a diversifier, not a return driver. Lucas: Exactly. Wine’s correlation to equities is around 0.2 — very low. And in periods of high inflation, like 2021-2023, wine prices actually held up better than bonds. The Liv-ex index rose 8 percent in 2022 while the Bloomberg US Aggregate Bond Index fell 13 percent. Luna: That’s a stark difference. But what about liquidity? If you need to sell a $50,000 case of wine quickly, can you? Lucas: Liquidity is the trade-off. Top wines trade frequently enough that you can sell within weeks on the secondary market, but you’ll take a spread. For blue-chip Burgundy or first-growth Bordeaux, bid-ask spreads are maybe 5 to 10 percent. For less known wines, it’s wider. Luna: So it’s like small-cap value stocks — higher transaction costs, but potential for outsized returns if you pick the right bottles. Lucas: Exactly. And there’s a learning curve. You need to understand vintages, critics’ scores, and regional trends. A great vintage from a lesser-known producer can outperform a poor vintage from a top domain. Luna: Is there any way to get exposure without buying physical bottles? I know there are wine ETFs or funds. Lucas: Yes, there are a few. The Vin-X fund and the Cult Wines fund, for example, allow accredited investors to invest in diversified portfolios of wine. Minimums are typically $100,000 to $250,000. There’s also a London-listed wine investment trust called The Wine Investment Trust, but it trades at a discount to net asset value sometimes. Luna: So it’s still very much a niche for the ultra-wealthy. But what about a retail investor with $10,000 — any way to participate? Lucas: Not really, unless they buy a couple of cases themselves. But there are platforms like Vinovest that let you invest in a managed portfolio with as little as $1,000. They handle everything — buying, storing, selling. The fees are around 2.5 percent annually, which is high but comparable to some art funds. Luna: Two and a half percent is steep. You need double-digit returns to justify that. Luna: That’s the passion asset appeal. It’s not just a number on a screen. Lucas: Right. And that’s why family offices like it. It’s a tangible asset that generates conversation and pride of ownership, while also providing portfolio diversification. Luna: So what should our listeners take away? If you’re a high-net-worth individual, is wine worth a look right now in May 2026? Lucas: I think it’s worth considering as a small allocation — maybe one to two percent — if you have the patience and the knowledge. The key is to buy through reputable sources, focus on proven vintages and producers, and hold for at least five years. Short-term trading in wine is a losing game because of transaction costs. Luna: And don’t buy it for the yield — buy it for the diversification and the enjoyment. Lucas: Exactly. And if you want to start, look at the 2019 Bordeaux vintage — it’s considered excellent but hasn’t appreciated as much as Burgundy, so there may be value. Or consider a fund that gives you exposure across regions. Luna: Good advice. I’ll stick to drinking wine rather than investing in it, but I can see the appeal. Lucas: Same here. But it’s a fascinating corner of the wealth management world that more people are taking seriously.