It has been a vintage year for investors in fine wines as the index price surged by a quarter to five year highs in its strongest rally since 2010 as the slide in sterling tempted US and Asian buyers back to the UK-based market.
Global fine wine marketplace Liv-Ex raised a glass to a 28pc increase in its index of top 50 most heavily traded wines which reached its highest level since 2011. Meanwhile the market’s broadest index, the Liv-Ex 1000, successively breached its all-time record highs in the last four consecutive months after surging 21pc in a year.
Bordeaux continues to hold the lion’s share of the fine wine market at 74.4pc as the Bordeaux 500 index climbed 21.8pc from last year.
Tom Gearing, founder of investment management company Cult Wines, said the market has seen a steady return of US investors due to the strength of the dollar compared to the weaker pound.
“It’s the most bullish we’ve seen the market since 2010. There was a meaningful and well-founded market recovery on the way anyway but it was really sparked into life by Brexit,” he said.
Mr Gearing added that investors who in the past have been wary of fine wine as a niche asset class have reconsidered investing in Bordeaux and Burgundy cases due to record low interest rates, wider economic jitters and increased transparency in fine wine trading.
Data compiled by Cult Wines shows that a £5,000 investment in the FTSE 100 in 1984 would now be worth £34,473 whereas the same investment in 18 cases of Lafite Rothschild 1982 would be worth £698,832.
Liv-Ex market research has said that the fine wine surge is showing signs of slowing but overall the market strength remains robust, with modest gains continuing despite a strengthening in the pound.
“It remains to be seen whether the long period of sustained rises will continue,” the research note added.
1 JANUARY 2017 • 8:00PM