Fine Wines – not your grandfather’s Investment Fund!
Nov 10th, 2009 | By Jody Clarke | Category: Featured, Financial NewsUp 9.5% over 12 months, the Liv-ex 100 Fine Wine Index (below) has clawed back some of last year’s losses, when the industry’s main benchmark index fell 14.6% in 2008. So should you be piling into the fine wine market?
Probably not. First off, new Asian buyers and a “whole pile of Johnny-come-lately types” are fuelling current demand. A six-litre bottle of Château Pétrus 1982 recently sold for a record £60,000 at auction in Hong Kong, a city where wine imports rose by more than 40% in the first eight months of the year.
Meanwhile, in Christie’s spring 2009 global sales, Asian and Chinese buyers accounted for 61% of the total sale value, compared to 7% in 2005. “With demand coming almost entirely from Asian buyers, and with that demand so heavily biased towards one particular producer, it would be wrong to start heralding the return of a bull market”, say the people over at the Vintage wine fund.
Asia is beginning to resemble Japan in the late 1980s, when cash-flush companies and property developers splurged on trophy works by artists such as Van Gogh.
But there’s another reason why wine just isn’t such a great investment.
Read the rest of the story on MoneyWeek.com.
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Jody joined MoneyWeek UK at the beginning of 2006. Clarke graduated with an LLB in Law and European Studies from The University of Limerick in Ireland and an MSc (Ag) in International Development at University College Dublin. He worked for the United Nations World Food Programme as an intern. where he completed his paper on the impact of HIV/AIDS, Weak Governance and Drought on Sub-Saharan Food Security.