Fine wine attracts the most demand among ‘passion assets’.

UK wealth managers see demand for fine wine comfortably outstripping other passion assets, such as watches, luxury handbags, and art, new research shows.

Recent research conducted among 50 UK-based wealth managers and financial advisers specialising in high-net-worth clients (￡100K+) has shed light on the evolving landscape of passion assets, revealing a notable trend where fine wine emerges as a standout choice, surpassing other luxury items such as watches, luxury handbags, and art in terms of investor demand and interest.

The study indicates a strong consensus among wealth managers that fine wine is set to experience a significant uptick in demand over the coming year, with a staggering 96% of respondents anticipating an increase in interest. Notably, three out of five wealth managers foresee a substantial surge in demand for fine wine, positioning it comfortably ahead of watches (86%) and luxury handbags (80%) in terms of projected demand.

This growing appetite for fine wine as an investment asset is reflected in the increasing presence of this unique commodity in high-net-worth client portfolios. The research reveals that over 40% of clients already invest in fine wine, with an average portfolio allocation of approximately 10%.

As fine wine gains traction as a legitimate alternative asset class, wealth managers are recognising its potential as a valuable portfolio diversifier alongside traditional investments like equities and fixed income, as well as alternative assets such as hedge funds and real assets. Experienced investors, who place a premium on diversification, are increasingly turning to fine wine to enhance the resilience and performance of their portfolios.

Moreover, the positive reception of fine wine by wealth managers underscores its growing appeal as a strategic investment option in an increasingly challenging investment environment. As traditional assets struggle to deliver desired returns, the allure of fine wine as an effective portfolio diversifier is expected to continue to grow, offering investors a compelling avenue for exploring new sources of value and growth.

In response to this growing demand, the fine wine sector is seeing a rise in professionalisation, with more wealth managers seeking partnerships with specialised wine investment firms to provide their clients with access to premium services and transparent pricing, further solidifying the position of fine wine as a sophisticated and promising investment opportunity.

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