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Last Frontier Investments: The Case of Alpine Wines

Published online by Cambridge University Press:  26 November 2019

Philippe Masset ,
Jean-Philippe Weisskopf  and
Clémentine Fauchery
Philippe Masset
Affiliation:
Ecole hôtelière de Lausanne, HES-SO Haute école spécialisée de Suisse occidentale, Route de Cojonnex 18, 1000Lausanne 25, Switzerland; e-mail: [email protected].
Jean-Philippe Weisskopf*
Affiliation:
Ecole hôtelière de Lausanne, HES-SO Haute école spécialisée de Suisse occidentale, Route de Cojonnex 18, 1000Lausanne 25, Switzerland
Clémentine Fauchery
Affiliation:
Ecole hôtelière de Lausanne, HES-SO Haute école spécialisée de Suisse occidentale, Route de Cojonnex 18, 1000Lausanne 25, Switzerland; e-mail: [email protected].
*
e-mail: [email protected] (corresponding author).
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Abstract

We identify and examine the performance of frontier investments from 2002 to 2017. Using fine wine as a setting, we find that the trade frequency and value of frontier investments in the form of Alpine wines have increased in recent years, leading to a rise in their prices above inflation rates. We further document that this frontier investment has been favorable in terms of risk-adjusted returns and volatility for investors. We also observe that the inclusion of frontier wines in a financial portfolio is favorable for investors, both in terms of returns and diversification benefits, due to low correlation coefficients. The identification and investment into frontier assets appears beneficial for investors looking for new opportunities. (JEL Classifications: C60, G11, Q11)

Keywords

Alpine winesdiversificationfine wineportfolio
Type
Articles
Information
Journal of Wine Economics , Volume 15 , Special Issue 2: Wine, Macroeconomics, and Finance , May 2020 , pp. 181 - 206
Copyright
Copyright © American Association of Wine Economists 2019

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Footnotes

We would like to thank an anonymous referee, the editor, and the guest editor, as well as Demian Berchtold and participants at the 2nd Wine and Hospitality Management Workshop and the INFER-INSEEC-LAREFI Workshop on wine macroeconomics and finance for helpful comments.

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