Wine investors' spirits pick up as index hits new high

Wine investors' spirits pick up as index hits new high
Chardonnay-sayers proved wrong, as fine wine index hits new high after tanking in 2008
APR 23, 2010
By  Bloomberg
The fine-wine rally reached a new high in March, representing a full recovery from the downturn that hit the sector during the global financial crisis of 2008. The London-based Liv-ex 100 Fine Wine Index, which tracks the price of 100 of the most sought-after wines, finished the month at 265, which represents a 12% gain in the first quarter of the year. By comparison, the S&P 500 gained just 5% over the same period. The wine index has now surpassed the previous high of 264 set in June 2008. “The new high completes a remarkable turnaround for the fine-wine sector, which was hit hard by the global credit crisis,” said Liv-ex director James Miles. Prices fell by as much as a fourth immediately following the collapse of Lehman Brothers Holdings Inc., Mr. Miles noted. Indeed, from the previous peak in June 2008, the wine index fell to a low of 204 in December 2008, a 23% decline. That, in turn, had some wondering if fine wines were such a good investment. But in the past 18 months, prices have regained all of the lost ground. Last year, the wine index gained 16.2, while the S&P 500 gained 26%. According to Mr. Miles, Asian demand for top Bordeaux wines, particularly from Hong Kong and China, has caused prices to soar over the past 12 months.

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