Knight Frank Fine Wine Icons Index 2018
With wine clinching second place as an investment of passion in The Wealth Report 2018, the latest Knight Frank Fine Wine Icons Index (KFFWII) reveals the latest trends in the world of investment wines and vintages.
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Compiled by Wine Owners, the KFFWII is continuously evolving as the ‘icon’ wines jockey for position, rising and falling out of the top rankings – so much so, that the index has confidently outperformed the FTSE over the past twelve months.
During March 2017 to March 2018, the KFFWII rose 9.6% to consolidate the impressive 38% growth seen in the previous 24 months. The finest investment-grade wines, such as Bordeaux and Burgundy, have been impacted by falling prices in Asia prompted by the weak dollar. This has caused uncertainty within the secondary market into China and could potential lead to the most uncertainty seen in a number of years.
For the next nine months, the KFFWII forecasts steady and gradual growth. Its Sterling-denomination means it faces downward pressure as the currency continues to strengthen against the US Dollar and Euro. Of course, such an optimistic forecast depends on continued, positive progress with Brexit negotiations.
KFFWII vs FTSE, March 2017 – March 2018
The KFFWII 2018 highlights
• A very small selection of regions – including Bordeaux and Burgundy – continue to remain at the forefront of area’s producing popular investment wines
• However, newer regions are beginning to establish themselves; Piedmont, Tuscany and Champagne are developing in the wine investment space as collectors and investors test the waters (and wine)
• While each new region has a particularly popular wine, patterns emerge over time. Wines move up through the ranks, lifted by the forces of economics (supply and demand), nature (climate and ecology), and human activity (viticulture and winemaking) – patterns which come to define each region’s shape and colour on the wine investment map
• There are currently several new patterns emerging, with a few beginning to solidify various wines’ status. The KFFWII includes a number of these fringe wines around a solid core of the investment staples.
10-Year Performance of Investment Wines from Burgundy, Champagne, Northern Italy and Bordeaux vs the FTSE 100
Look out for a series of upcoming posts that will reveal the top wines for investment from the likes of France, Italy, Spain and the USA.
With thanks to Jonathan Reeve at Wine Owners for his contributions to this post.