Fine wine prices surge

European and American investors are returning to the fine wine marketplace in force; with annual returns of up to 34% it's no surprise.
March, for instance, saw the fine wine market post its best monthly result in near three years; the main index, the Liv-ex 100, increased by 5.5% and the Claret Chip rose by 6.6%.   This was the twelfth straight month of increase, giving an annual return of 27.6% and 33.6% respectively.

 “These are encouraging signs for the overall health of the market, and may indicate that demand from the longer established markets of Europe and the United States is beginning to return in force.  The widening of the market is also giving the opportunity to stock pick instead of chasing Lafite higher,” said Andrew della Casa, director of The Wine Investment Fund.
The star performer was Chateau Lafite, with prices rising across all vintages at close to 10% during the month.  Its status was seen at auction in Hong Kong when a single lot of Lafite 1996 sold for £15,000.  It was available in the UK market for £10,000.  Asia continued to dominate and a single-owner sale in Hong Kong achieved 100% of lots sold, with the total exceeding the high estimate.  One lot of Pétrus 1998 sold for around £25,000.

“The better news for serious investors were the signs of a broadening base to the recovery in March, which saw the highest rise since May 2007,” said della Casa.
Cheval Blanc, which had previously appeared to be immune to the market recovery of the last 12-15 months, showed increases in March of 8-10% for the 1995 and 1996 vintages
Outside the very top wines there were increases of at least 5% across a range of vintages for Ducru Beaucaillou, Léoville Las Cases, Léoville Poyferré and Pichon Lalande.

The Wine Investment Fund, which was formed in 2003 for fine wine investors, invests in wines from the top 40 Bordeaux Chateaux and only buys stock that is at least four years old with an established reputation as a good vintage.  This is because most wines bought at the en primeur stage tend to plateau after an initial surge in prices, making them a riskier investment than established vintages.  The Liv-ex index shows that fine wines have lower volatility than equities, bonds, gold and many other asset classes.