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Invest £1K

How to invest £1k in fine wine

The world of fine wine is incredibly exciting but with so many regions, producers and vintages to choose from it can seem overwhelming to those just starting out.

In this article resident Cult Wines’ investment writer Aaron Rowlands and our favourite wine expert, Kelly Liang, explain how they pick the most promising bottles and what to look for when investing £1,000 into wine.

By

Date

CultX Team - Wine Investment Specialists
02/11/2022

Summary

  • With £1,000 to invest in wine, look for bargains in the traditional cornerstones of wine investment: Burgundy and Bordeaux
  • When it comes to investment-grade wine, look for the bottles by up-and-coming producers that have scored highly with critics. These bottles carry more risk as demand is unproven; however, they may have better chances of appreciation, especially as supplies deplete through consumption over time
  • The quality of the vintage, the prestige of the producer, and fluctuations in regional popularity are the greatest drivers of a wine’s current and potential future value
  • Before making your first wine investment, define your goals for investing and familiarise yourself with the market - this will help you devise the strategy that works best for you

In this article, we cover

Our wine investment experts

There are few professionals who know more about the world of wine investment than Cult Wines resident Research Editor & Investment Writer Aaron Rowlands. In addition to a solid foundation in financial journalism and investment, he also holds the WSET Level 3 qualification.

Wine writer Kelly Liang is a true oenophile with an encyclopaedic knowledge of the wine industry that’s second to none. She’s currently pursuing her WSET Level 4 qualification, the highest level of wine mastery offered by WSET.

Can you start a wine investment portfolio with £1,000

“Yes, it's definitely possible to begin investing in wine with a £1,000 budget. Starting with smaller amounts is a great way to start your investment journey through the complex world of wine. Then when you're ready, you'll be able to make bolder decisions based on a solid foundation of knowledge," says Kelly.

Whether you’re looking for attractive returns, immersing yourself in your passion or hobby, or simply hoping for bragging rights. Fundamentally, your motivation will lead your investment strategy.“

Fine wine investing can be many things for different people,” Aaron says. “Whether an investor is looking for stability, diversification, sky-high returns from Burgundy, or finding the next big thing in the wine market will determine their investment strategy.

You’ll also need to consider your time horizon and, of course, your budget. Burgundy returns were a phenomenal 31% last year, but that’s a collection of very specific bottles from the most well-known vineyards. If you’re coming in with an investment level of £1,000, many of the big names like Romanée Conti or Domaine Leroy will be out of reach. These bluechip wines can command prices of over £20,000 for a single bottle. Instead, there are a number of more attainable alternatives new investors can consider.”

Kelly emphasises the importance of familiarising yourself with the wine market before making your first purchases. She says, “I would build a bit of confidence by making sure you understand the basic regions, the different categories of producers, and the different levels of fine wines you can access before making any large investments. There’s a huge amount of information on wineinvestment.com available to those looking to up their wine knowledge.”

What makes an investment grade wine?

"There’s no hard and fast definition, but if a fantastic wine is meant to be drunk young then it’s probably not investment-grade wine because it’s not going to be as good with age,” Aaron explains.

Within the investment grade category, we look at critic scores for quality, the producer’s brand prestige and again, that scarcity. When you have great vintages from certain producers which are really scarce, that will drive up the price. Maybe a hailstorm wiped out half the crop in one year – if that quality is still good, but there’s half the supply, that probably makes it an even better investment if you can get hold of it.”

Which wines should I add to my portfolio?

Building a large fine wine portfolio takes time, but by starting off with a solid foundation of reliable performers, you’ll learn what to look for and be able to start diversifying into less obvious opportunities.  

When looking for investment grade bottles, Kelly shares the key evaluation criteria every investor can use:

  • Quality: Make sure that the bottle has a number of reputable sources attesting to its quality. Not only will this increase its potential for improving with age, but critically-acclaimed wines tend to attract greater demand - which can mean greater potential for returns.

  • Indication of demand: Non-traditional markets like fine wine aren’t as transparent as the stock market. It can seem challenging to get a definitive understanding of demand, and trade and auction prices are often difficult to access.

  • Regional intelligence: By analysing what’s happening in the market at a regional level, you may be able to find unexpected opportunities.

Kelly shares, “In Bordeaux, due to the heritage of the classification system - the oldest version has been in place since it was introduced by Napoleon III in 1855 - people often think the different wine rankings, which correspond closely to price, are set in stone. However, this is not necessarily so. A big reclassification on the horizon for the Saint-Emilion region  could really shake things up.”

In Kelly’s example, changes in Saint-Emilion will mean that wines previously ranked as lesser quality could move into higher designations and attract greater demand. If you were considering investing in wines from this sub-region, you might want to look for growth opportunities in the wines up for reclassification.

In this way, you might be able to pick up bottles for relatively low costs and see significant appreciation as the reclassification of the producer drives up demand.

Best fine wine investments for under £1,000

In general, Aaron says, “I would recommend looking for producers that are up and coming and producing consistently excellent wines for very good value.“

In terms of regions, he says, “I would probably go for a producer in Bordeaux – it’s the most established market and the most liquid, so if you change your mind about the wine you want to invest in (or whether you want to invest at all), it will be easy to sell."

“I recommend investors take a look at Le Clarence de Haut Brion (a second wine of Chateau Haut Brion) and Leoville Barton or Smith Haut Lafitte.”

Bordeaux is one of the traditional picks for any wine portfolio, but a top tier “first growth” wine may not be feasible for a £1,000 investment. Instead, Aaron advises going for a Bordeaux château’s ‘second wine.’ He explains that “vintners often don’t like to use the phrase ‘lesser wine’, but a second wine is their other incarnation, their alter ego. This can be a great way for new investors to add iconic wine brands to their portfolio.”

Burgundy is another classic choice for a first wine investment, and Aaron shares that he’d seriously  consider a Domaine Tortochot, Mazis Chambertin Grand Cru 2019 or 2020. He explains, “It’s a family-owned vineyard handed down through the generations. Wonderful wines like these would be a great addition to a £1,000 wine investment.”

Like Bordeaux, Burgundy has an established market and generally experiences stable growth - it’s not considered a particularly risky investment and you’ll be able to sell or trade easily should you decide to try investing in another region instead.

Another good tip, Aaron adds, is to look at buying some of these wines En Primeur (before it’s been bottled). “En Primeur campaigns in Bordeaux take place the year after the harvest. Often buying this way can be cheaper than waiting until bottles are physically available. These bottles won’t be released for another two years.”

Purchasing En Primeur can give you a better chance of securing high-quality wines and for lower prices than they’ll sell for when they’re bottled. This can allow for a greater potential for growth and better returns than if you wait to buy them until after they’re bottled.

Get started with fine wine investment

Empowering people through technology, data and access to a global community, Cult Wines is redefining the fine wine market – making it accessible, secure and rewarding.

Combining Cult Wines heritage with the latest technology, and powered by world-leading data and predictive AI, CultX is the ultimate marketplace for buying, selling, collecting and investing in over £200m of the world’s most prestigious Fine Wines.

If you are looking for the control of a self-managed portfolio with low fees then CultX’s wine investment app is for you.

Sign up for the waitlist now for early access to the app.

Meet the experts

Aaron Rowlands - Research Editor & Investment Writer - WSET Level 3

Aaron Rowlands began his career as a financial journalist and his passion for wine after spending time with a winemaker in Bordeaux.

He brings his experience of both finance and fine wine to his role as Cult Wines’ Research Editor. Working with the investment team and portfolio managers, he’s become well-versed in the essential strategies for identifying new investment opportunities and building successful portfolios.

Kelly Liang - Wine Writer
WSET Level 4 Diploma in Wine in progress

Kelly Liang is currently studying for her Wine & Spirit Education Trust Level 4 Diploma in Wine, the highest qualification offered by WSET.

A chance tasting of a Vouvray Demi-sec from the Loire Valley inspired her to learn as much as she could about wine and set her on her path toward pursuing wine expertise. She’s already achieved the prestigious WSET Levels 1 - 3 Awards in Wines, and brings her knowledge and passion to the industry.

* Past performance is not indicative of future success; the performance was calculated in GBP and will vary in other currencies. Any investment involves risk of partial or full loss of capital.

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