Investors looking for a safe haven amid the post-Brexit vote stock market turbulence could find calm in a surprising corner: the fine wine market.
Vintage investments have a number of defensive characteristics and tend to perform well when the pound is weaker.
During a week in which the pound has fallen to a 31-year low following the UK's vote to leave the European Union last Thursday, cheaper Sterling is set to make wine cheaper in foreign currencies and stimulate overseas demand.
The Wine Investment Fund told City A.M. that, although its Bordeaux-sourced wine investments are priced in Sterling, the majority of buyers are based abroad, typically in China, the US and Japan.
From 2011 to 2014, the fine wine market suffered a 36 per cent price correction following a lengthy period of declining prices, and sales were then flat in 2015.
However, investments have delivered annual returns of almost seven per cent since 2003 and prices have also increased by seven per cent in the year to date, according to the Wine Investment Fund.
Holdings in wine are not linked to the prices of other assets in most circumstances, with the long-run correlation between wine prices and the FTSE 100 coming in at just 0.04.
"Asset markets are likely to be volatile and challenging to navigate while everyone comes to terms with the implications of the referendum," Andrew della Casa, director of the Wine Investment Fund, said.
"But there are good reasons to think that wine may benefit from the uncertainty: it is physical, and it tends to perform better when Sterling is weak. Add in its excellent long-term track record and favourable cyclical position, and it is one asset for which the future looks bright."
The Wine Investment Fund told City A.M. that on average £40,000 is invested by each of the fund's 400 investors, though this increases significantly the further you go East - with those in Hong Kong and China paying significantly more.
While the fine wine world is typically the home of high net-worth individuals (HNWIs) and management funds, sin stocks across the board tend to outperform in times of market uncertainty.
The shares of alcoholic drinks giant Diageo and those of cigarette makers British American Tobacco (BAT) and Imperial Brands have outperformed since the Brexit vote announcement on Friday.