South African fine wine investment, 2019–2023: A case study for an emerging wine region

Abstract

Evidence on fine-wine investment remains dominated by established European regions, leaving limited peer-reviewed evidence on whether an emerging wine region such as South Africa can be analysed credibly as an investable alternative asset. In this study, we examined whether South African fine wine can function as a portfolio diversifier, using data from 29 March 2019 to 31 March 2023. Using secondary-market transaction data from Wine Cellar brokerage trades and Strauss & Co Fine Wine Auctions, we compiled 2756 mixed lots, identified 523 unique producer–vintage–varietal combinations, and constructed a Top-10 South African Fine Wine Index (SAFW10) using repeat-sales regression. The sample is dominated by red wines (approximately 67% of transactions), with white and fortified wines accounting for about 29% and 4%, respectively. We then compared SAFW10 with Liv-ex benchmarks and selected conventional assets in a monthly rebalanced portfolio backtest. SAFW10 displays low contemporaneous correlation with the selected traditional assets in our sample and improves selected risk-adjusted portfolio metrics. Because the sample is short and the market is thinly traded, the findings are interpreted as descriptive evidence rather than definitive proof of persistent outperformance. The results nonetheless support the case for broader data collection, greater market transparency and further microstructure-aware research on South African fine wine as an emerging alternative asset.