Bordeaux Wine as a Financial Investment
Lee W. Sanning, Sherrill Shaffer and Jo Marie Sharratt
Journal of Wine Economics, Vol. 3, No. 1, 51-71
Abstract
For repeat transactions data from monthly auction hammer prices, we analyze the level and quality of Bordeaux wine returns using the Fama-French Three-Factor Model and the Capital Asset Pricing Model. Returns average up to 0.75% per month above those predicted by these models. Further, investment grade wines benefit from low exposure to market risk factors, thus offering a valuable dimension of portfolio diversification. These findings are consistent with simple theoretical considerations and support a documented growing interest in wine investments.