The best liquid investment?

Top-quality wine, has outperformed the Russell 3000 Index between January 1996 and January 2009, according to two Swiss-based economists, Philippe Masset and Jean-Philippe Weisskopf, Bloomberg reports.

The researchers studied more than 400,000 prices on regularly traded wines from the 13-year period, to construct a general wine index and a gauge of top vintages.

The performance of the wine prices as noted by the economists is corroborated by other measures. In the UK, for example, the Liv-ex 100 Fine Wine Index, which tracks prices of 100 most sought-after fine wines, reached the level of 265 at the end of March, one point above the previous all-time high set about two years ago.

Masset and Weisskopf constructed the index by  researching prices from 144 auctions with a combined value of $237 million, using vintages from 1981 to 2005.

“Our findings show that the inclusion of wine in a portfolio and, especially, more prestigious wines, increases the portfolio’s returns while reducing its risk, particularly during the financial crisis,” wrote Masset, a professor at the Lausanne Hotel School, and Weisskopf, a researcher at the University of Fribourg, in their study, Raise Your Glass: Wine Investment and the Financial Crisis.

The general wine index beat the Russell 3000 from 1996 to 2009 by holding value over the most recent market downturn, with lower volatility than equities, according to the study. Since mid-2008, the wine measure fell 17 per cent, while the stocks gauge declined 47 per cent.

The index of highest-quality wines, “first growth wines of top vintages only,” performed nearly 300 per cent better than the regular wine index, according to the study.