Q4 2020 Investment Overview

Cult Wines Financial Overview and Quarterly Performance Summary

• Global Markets Overview
• Fine Wine Market Overview
• Fine Wine Market Outlook
• Cult Wines Regional Performance


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Cult Wines Q4 2020 Performance Introduction

The fourth quarter was a microcosm of the entire 2020 for fine wine investments as they demonstrated remarkable stability amid spikes in coronavirus cases and a range of surprise political and trade developments around the world. Drawing on our extensive research and experience in the growing fine wine market, Cult Wines Index produced a 4.2% fourth-quarter return, resulting in an impressive 5.8% annual figure and outperforming the global wine market benchmark index by 379bps.

In this report, we look at the key trends in the fine wine market and analyse the performance of major wine regions.  We have also partnered with HP Wealth Management to look at the key events in the wider financial markets over the past three months to provide a comprehensive account of the fine wine investment universe at the end of 2020.   

This Fourth Quarter overview summarises the global financial and fine wine market performances to December 31, 2020.

Q4 Global Financial Markets

  • Equity markets overcame a weak October to produce strong fourth quarter returns on the back of optimism surrounding the development of effective coronavirus vaccines.
  • Accommodative monetary policy and fiscal stimulus measures also supported global markets. Risk sectors of fixed income markets outperformed core government bonds with corporate credit spreads ending the period tighter.
  • US equities hit new highs with the S&P surging 12%. President-elect Joe Biden’s victory in November elections increased hopes of an improvement in geopolitical tensions.
  • Emerging markets outperformed developed markets. Asia markets led the way, helped by the region’s countries having better control of the coronavirus pandemic.

Q4 Fine Wine Market Highlights

  • Liv-ex 1000 posted positive returns in each month of Q4, netting a quarterly return of 1.0%. The ROW 60 had the highest return at 2.4%.
  • Markets remained stable despite China announcing tariffs on Australian wine. The US increased tariffs on some French and German wines at the end of the period, but Joe Biden’s election victory adds optimism that the relationship with EU will improve.
  • The last-minute UK-EU trade deal means EU and UK wines will remain tariff free and costly VI-1 certificates will not be needed.

Q4 Cult Wines Performance Highlights

  • CW Main index posted strong Q4 gain of 4.2%.
  • CW Burgundy was top performing region with a 12.3% jump. Our focus on second tier and up-and-coming producers helped. CW ROW also saw an impressive 12.2% rise.
  • CW Champagne index rose 5.2% despite the Liv-ex Champagne 50 ending quarterly slightly down. Our focus on back vintages was a key to performance.

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Quarter Four Investment Overview 2020

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Quarter Three Investment Overview 2020

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Quarter Two Investment Overview 2020

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Quarter One Investment Overview 2020

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Quarter Four Investment Overview 2019

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Quarter Three Investment Overview 2019

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Quarter Two Investment Overview 2019

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