However, investment is about risk as well as return, and on this dimension too, wine performs well. Taking every five-year period since 1988, wine has shown a negative return in just one period – with a loss of only 1.1 per cent. By comparison, the FTSE 100 has seen 72 negative periods, with the worst being a loss of 39 per cent. Historically, fine wine has proved to be a low-risk asset class. To understand why, we have to turn to the fundamental characteristics of the market.

Bordeaux – and we consider only fine wine from Bordeaux for investment purposes – is a finite geographical area in France with a finite number of wine producers, so the wine produced each year is also finite.

Over time the quantity of each wine can only decrease as the wine is drunk. Therefore, supply naturally falls.

There is also good news on the demand side. As these wines mature they improve in quality and become more sought after. What other asset is there where its quality increases as it gets older and has a naturally falling supply?

Finally, the market is now global, and continues to rise as consumers from newly wealthy countries discover wine.

So, how can these characteristics best be exploited? In our view, only the top 35 or so of the 8,650 registered châteaux in Bordeaux have a long enough track record of quality and sufficiently liquid secondary markets to be considered investment grade.

Many of these wines sit on price plateaus of varying lengths during their period of maturation, interrupted by ‘step’ increases in price when they hit windows of optimal drinking. During these windows demand rises because consumers want to drink the wine, while supply falls because the wine is being drunk – this creates the conditions for an often rapid increase in price.

After a while attention turns to another vintage, and the first wine enters a new plateau phase until the next drinking window. The key is to judge which wines are nearing a significant rise in value at the end of a price plateau.

Over the medium and longer term, fine wine has proved to be a low-risk asset class, but the past 12 months have seen a sharp correction from the over-exuberant market of 2009 – 2011: the Liv-ex 100 index, is down some 29 per cent from its peak. This looks very much like an ‘oversold’ situation with prices well below trend.

The current position could be an opportunity to exploit the market’s solid underlying returns combined with an unusually favourable starting position – in short, potentially the best time to enter the market since early 2009.

Andrew della Casa is director of The Wine Investment Fund