Liv-ex Fine Wine Investables Index hits new high

By March 4, 2010Fine Wine Market

February saw the Liv-ex Fine Wine Investables Index reach a new high of 249.19.

This is the first time that any of our core indices (i.e those that are calculated using the Liv-ex Mid Price, our mark-to-market pricing mechanism) has moved above the level set in June 2008. 

So why is it this index that is hitting a new high, rather than the Liv-ex 100 Fine Wine Index or the Liv-ex Claret Chip Index? The key factor is that the Liv-ex Fine Wine Investables includes the top wines from lesser vintages – such as First Growths from 2001, 2002 and 2004. As we outlined in a previous post, it is these wines that have shown some of the largest gains over the past year. 

Of the ten best performing wines in the index, none come from a recognised "strong vintage". Lafite 2001 leads the pack with an increase of approximately 70% since June 2008, moving from £2,750 to around £4,750. Ausone 2005 is the worst performer; currently trading at £14,200, it remains some 35% below its previous high. Of the 185 wines in the index that were also components in June 2008, just over half are currently showing gains.

Below is a graph that plots the index over a twenty year period. Although the eighteen months following the sudden market fall of September 2008 may have seemed a long, slow recovery to many traders, from a historical perspective the bounce back has been remarkably rapid. It took the market more than four years to reach a new high following the October 1997 dip (largely sparked by the Asian crisis) and a good eight years before the market saw any meaningful increase.