Equities started the year poorly but fine wine prices shone in January, new figures show.

The start of 2016 may have been grim for many equity indices but it has been much more cheery for those investing in fine wines from regions such as France’s Bordeaux.

According to the Liv-ex exchange tracking auction prices for fine wines, its Liv-ex 100 Index rose 1.1 per cent in January, while the Liv-ex Investables Index was up 1.4 per cent. By contrast, Shanghai’s benchmark stock index fell 22 per cent in January, and oil has slumped by 30 per cent since the middle of November last year. 

Over the past 21 years, fine wine has outperformed equities, gold and crude oil as an asset class, and the latest data will add fuel to those in the wine investment field who tout the benefits of the noble grape as a portfolio diversifier. (It should be noted that fine wines may be less liquid in market transaction terms than conventional list equities, however.) 

The ratio of bids to offers on the Liv-ex exchange has reached the highest level since the middle of 2010, rising over 1.0 in January. Historically, a ratio above 0.5 per cent indicates a rising or at least stable market. 

According to a statement from The Wine Investment Fund, a UK-registered vehicle holding a portfolio of fine wine assets, January typically is a relatively quiet month for auctions and sell-through rates were broadly in line with expectations. TWIF has argued that investors should be careful about becoming carried away by recent positive figures, noting that recent falls in the sterling exchange rate have boosted fine wine prices.

“Fine wine prices are still sitting well below their long-term trend level and a sustained recovery is more likely than not in the near future. The recent solid performance against a very difficult backdrop for other asset classes suggests this recovery may be underway,” said Andrew della Casa, director of TWIF.