Today on The Drinks Business, Christie’s Anthony Hanson MW named Petrus the “king” of wine investment, explaining, “It has yielded an average annual return of 14% all the way through bull and bear markets – it is incredibly dependable as a château.”
A strong member of the Right Bank Super 50, in our recent review of the Bordeaux 500’s performance year to date Petrus came eighteenth, its last ten vintages posting an overall loss of 2.7%. This was a better performance than the other wines in the Super 50 and any of the First Growths.
Anthony Hanson MW’s comment is based on auction data for a large range of vintages. We analysed the performance of recent Petrus vintages by creating an index and comparing it against the Liv-ex 50 and the Bordeaux 500.
As you can see, all three indices follow a similar trajectory, spiking in June/July 2011, but since these peaks their relative falls have varied. In the last year the Liv-ex 50 has dropped by 31.3%, the Bordeaux 500 by 17.5%, and the Petrus Index has fallen the least, by 13.0%.
For the majority of the last eight and a half years, Petrus has outperformed the Bordeaux 500: this difference is currently at its most prominent. Meanwhile the continued fall of the First Growths compared to the relative stabilising of Petrus means that the gap between the two is shrinking.
Looking at the CAGR (compound average annual return), recent Petrus vintages are averaging a 13.4% return, almost matching the 14% noted by Anthony Hanson MW. Its CAGR may be slightly below that of the First Growths, who since 2003 have yielded 14%, but it is nevertheless surpassing the Bordeaux 500, which sits at 11%.
Petrus may not deserve its crown just yet, but if current trends continue it may not be too long before it does.
