Positive end to the year as fine wine markets closed with an annual 20.54% gain
LONDON (JANUARY 12, 2023) – Cult Wines, the company actively redefining the fine wine market, reports fine wine markets closed out 2022 in good form with a 1.56% Q4 gain, as measured by the Cult Wines Global Index. The December gain of 0.95% marked an encouraging rebound in momentum after a slower 0.05% November figure. The new Index, which forms a benchmark measurement of the global fine wine market performance, posted an annual 20.54% gain in 2022.
Fine Wine Market Snapshot
Fine wine markets remained healthy into the year’s end despite the ongoing economic concerns and volatility in wider financial markets. Throughout the year, fine wine prices maintained an upward trajectory, displaying relative immunity to a volatile macroeconomic environment. December was no different, although the pace of appreciation eased amid cost-of-living and recession concerns in major economies.
Fine wine finished the year with a 20.54% return, outperforming both traditional financial assets and alternative assets like Gold, which ended the year with a 1.55% return. This contrasts with steep losses in many global equity and bond markets. Traditional 60-40 portfolios suffered from volatility amid multi-decade inflation highs, soaring energy prices, deteriorating economic growth and geopolitical tensions. Demand for fine wine remained healthy throughout the challenging 2022, and many investors will likely continue to seek real assets such as fine wine in 2023 and beyond as inflation remains at multi-decade highs in many countries.
Macro Market Snapshot
Fine wine outperformed financial markets as they slumped in the final three weeks of December to close out a very challenging 2022. After a period of recovery in October and November, the December decline resulted in one of the worst years since the Global Financial Crisis for many sectors. 2022 was a difficult year for the S&P 500, as the index was down 18.11%—its worst year since 2008’s -38.49%. The FTSE 100 eked out a modest gain, ending the year 4.70%.
The early Q4 recovery in both stocks and bonds stemmed from an easing of inflation in the US, which raised expectations that the Federal Reserve would pivot away from rate hikes in 2023 and support economic growth. However, December provided a reminder that we are far from turning a corner as weak growth, inflation and more monetary tightening in the near-term halted the recovery. Both the Federal Reserve and the Bank of England raised rates by 0.50% in December.
|
Index |
Q4 Return % |
12-month return |
3-year volatility |
|
Fine wine* |
1.56% |
20.54% |
3.60% |
|
S&P 500 (TR) |
7.56% |
-18.11% |
21.16% |
|
FTSE 100 (TR) |
8.69% |
4.70% |
15.87% |
|
NASDAQ Composite (TR) |
-0.79% |
-32.54% |
24.23% |
|
iShares MSCI All Country Asia ex Japan ETF |
10.70% |
-21.66% |
20.93% |
|
US Treasury Bonds** |
-0.22% |
-16.71% |
7.48% |
|
Gold (USD/oz) |
9.93% |
1.55% |
14.79% |
*Fine wine= Cult Wines Global Index; **US Treasury Bonds = iShares 7-10y US Treasury Bond Index
Volatility = Rolling 3-year standard deviation of monthly returns
Source: Wine-Searcher, Investing.com as of 31 December 2022. Past performance does not guarantee future results.
Italy and US deliver strong returns in final month of the year
The Cult Wines USA Index enjoyed a late-year surge with a 2.62% jump in December on its way to a 15.99% annual mark. US heavyweights like Dominus, Mayacamas, and Verite’s Le Desir made solid gains helping to drive performance of the region. While growing recognition of high-quality fine wine in Oregon and lesser-known AVAs in California has also helped contribute to positive gains.
Following USA, the Cult Wines Italy Index returned a gain of 0.94% in December. After taking a back seat in 2022 to Burgundy, Champagne and the USA, the excellent combination of Italy’s quality and good value in the current market could lead to stronger performance going forward.
Bordeaux prices declined slightly. This most established segment of the market has seen slower performance over the past year. Cult Wines Rest of World Index (Australia, Chile, Spain) also edged lower in December.
Cult Wines Global Index Performance Figures
|
|
December |
YTD |
1yr |
3yr |
5yr |
|
Cult Wines Global Index |
0.95% |
20.54% |
20.54% |
42.58% |
53.86% |
|
Cult Wines Bordeaux Index |
-0.47% |
5.14% |
5.14% |
13.68% |
13.90% |
|
Cult Wines Burgundy Index |
0.76% |
31.31% |
31.31% |
70.12% |
97.68% |
|
Cult Wines Champagne Index |
0.62% |
19.35% |
19.35% |
54.08% |
66.17% |
|
Cult Wines Rhone Index |
0.55% |
10.12% |
23.79% |
23.79% |
28.50% |
|
Cult Wines Italy Index |
0.94% |
9.22% |
9.22% |
26.60% |
38.95% |
|
Cult Wines USA Index |
2.62% |
15.99% |
15.99% |
33.12% |
41.01% |
|
Cult Wines Rest of World Index |
-0.41% |
8.97% |
8.97% |
23.18% |
32.96% |
Source: Pricing data from Wine-Searcher as of 31 Dec 2022. Past performance is not a guarantee of future results
Champagne ends strong but Burgundy remains king of 2022
Cult Wines Burgundy Index’s 31.31% annual gain made it the top performing region in 2022. Seasonal buying before the holidays may have helped keep the momentum going in Champagne which posted a 19.35% annual mark, second only to Burgundy.
Cult Wines Global Index and Regional Indices Q4 and 2022 returns
Source: Wine-Searcher as of 31 December 2022. Past performance is not a guarantee of future results.
Top Performers
Burgundy and Champagne’s dominance is best illustrated by a look at the top ten performing wines (all vintage average) in the Cult Wines Global Index in 2022. All ten came from these two red hot regions. Cedric Bouchard, Roses de Jeanne Cote de Val Vilaine posted an impressive 160.00% increase, followed by Cedric Bouchard, Roses de Jeanne with 124.90% and Les Ursules Blanc de Noirs rounding out the top three with 13.1%.
Napa Valley boasted the top two wines from elsewhere with Stag’s Leap Wine Cellars SLV (+51.8%) and Caymus Cabernet Sauvignon (+46.5%). Other notable 2022 performers included a German Riesling (Egon Muller Scharzhofberger Riesling Kabinett, Mosel +44.2%) and a fantastic and excellent valued Barbaresco (Produttori del Barbaresco, Barbaresco, Ovello Riserva +41.7%).
Top 10 wines of 2022
|
160.0% |
Cedric Bouchard, Roses de Jeanne Cote de Val Vilaine |
Champagne |
|
124.9% |
Cedric Bouchard, Roses de Jeanne Les Ursules Blanc de Noirs |
Champagne |
|
113.1% |
Egly-Ouriet, Brut Millesime Grand Cru |
Champagne |
|
104.4% |
Domaine Georges Mugneret Gibourg, Nuits-Saint-Georges Premier Cru, Aux Chaignots |
Burgundy |
|
90.5% |
Coche-Dury, Meursault |
Burgundy |
|
89.8% |
Domaine Leflaive, Puligny-Montrachet |
Burgundy |
|
87.9% |
Domaine Dujac, Gevrey-Chambertin Premier Cru, Aux Combottes |
Burgundy |
|
86.3% |
Domaine Leflaive, Puligny-Montrachet Premier Cru, Clavoillon |
Burgundy |
|
82.3% |
Philipponnat, Blanc de Noirs |
Champagne |
|
69.3% |
Domaine Armand Rousseau, Charmes-Chambertin Grand Cru |
Burgundy |
The Cult Wines Global Index can be viewed on CultX.com, the next generation digital trading platform at CultX.com/indices.
ABOUT THE CULT WINES GLOBAL INDEX
The Cult Wines Global Index forms a benchmark measurement of the global fine wine market performance. Powered by Wine-Searcher, the world’s most extensive source of powerful wine pricing data, the Index is comprised of a dynamic set of wines that represents the most sought-after, tradeable fine wines in the market based on strict liquidity criteria. The Global Index is comprised of the following regions – Bordeaux, Burgundy, Champagne, Rhone, Italy, USA and Rest of World, providing a comprehensive world view of the tradeable fine wine market.
ABOUT CULT WINES
Founded in 2007, Cult Wines is forging the future foundations of the fine wine market by creating products and experiences that unlock opportunities for producers and consumers. Empowering people through technology, data and access to a global community, Cult Wines endeavours to re-define the fine wine market – making it accessible, secure and rewarding. Headquartered in the UK, Cult Wines has offices in Canada, China, Hong Kong, Singapore, Dubai and the US. For more information, please visit www.cultwines.com/ or find us on LinkedIn, Twitter, Facebook, or Instagram.
