Bordeaux Wine as a Financial Investment*

Lee W. Sanning, Sherrill Shaffer and Jo Marie Sharratt

Journal of Wine Economics, 2008, vol. 3, issue 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 (JEL Classification: G11.G12).

Date: 2008
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