Expect the Unexpected

Geoffrey DeanExpect the unexpected is probably the only conclusion we can reach after Donald Trump’s victory in the US presidential election. This most unpredictable of years is likely to be followed by another, at least as far as financial markets are concerned. Volatility, already nurtured by Brexit, is the one thing we can be reasonably confident about after Trump’s win and imminent accession. Fine wine, therefore, looks to be an even securer bet for investors than it has in an already successful 2016.

Liv-ex 100, whose index is published at the end of each month and tracks the hundred most traded fine wines on the secondary market, rose for the eleventh successive month in October when it was up 3.6% (and 22.3% for the year to date). That represented the joint biggest monthly gain this year, July having witnessed the same upward hike. Liv-ex 100 is at its highest level since March 2012.

Liv Ex Chart

Liv-ex’s Fine Wine 50, which deals only with Bordeaux first growths over the first decade of the new millennium, was also up 3.47% in the month of October to 332.32. It is calculated daily, and by the close of business on 9 November, had continued its upwards ascent to 334.09. In the year to date, it has risen over 26%, making it a very good investment (Capital Gains Tax-exempt of course for UK taxpayers). On November 10, Grand-Puy-Lacoste, the Pauillac classed growth, reached an all-time high for a 12-bottle case of its 2000 vintage (£840).

Masseto Wine BarrelsThere were big jumps in value outside Bordeaux in October, with Burgundy, the Rhone and Italy faring especially well. Comte de Vogüé’s 2012 Musigny Vieilles Vignes enjoyed a 15.5% increase to £5,619 per case, while Domaine de la Romanée-Conti’s 2011 La Tâche was only just behind with a 15.4% rise. Beaucastel’s 2012 Châteauneuf-du-Pape moved north by 12.2%, while the two Super Tuscans, Masseto and Ornellaia, saw respective hikes of 11.9% and 10.3% for the 2010 vintage.

All this is encouraging news for fine wine investors. Those dealing in British pounds will be heartened by the revelation this week from Liv-ex that their 100 index, which is calculated in sterling, is up 23.1% over the past 12 months. Canny investors can not only tap into a Sterling market on the rise but find discounts in other international markets, a perfect illustration of the ability to invest in fine wine to hedge currency movements.

For more information contact the Vin-X team on 0203 384 2262