Liv-ex, the fine wine exchange, has made the annual swap of vintages in the Fine Wine 50 (the index that tracks the ten most recent physical vintages of the First Growths). This year the index replaced the 2001s with 2011s, but which would you prefer to have in your cellar?
Above are the replacements that have been made to the index during July. Look at the switch for Chateau Margaux: both wines have the same point score, yet the less mature wine has a higher market price. On the other hand, Mouton Rothschild shows the less mature wine with a lower market price and a higher point score, which suggests that it could provide some upside over a 10 year horizon.
The Haut Brion 2011 does hold an extra point over the 2001, but does this suggest the potential for investor returns? While it does show relative value in the First Growths for these years, an appealing alternative is the 2006, which scored 96 points and has a market price of SFr 3’675.
Even if Latour 2011 achieves the top end of its current point range, 95 points, then it still doesn’t have a positive trajectory against the 2001 and is unlikely to be a positive influence on the Liv-ex 50 from this position. The future of Lafite is difficult to judge, as the last 15 vintages have all fallen more than 10% in the last year. However, the 2011 has fallen less than the 2001 in the last year, suggesting that the updated index may face less of a drag from Lafite.
The first half of August has seen the Fine Wine 50 run flat, but is this the end of price decline in the First Growths? A year ago the index rose in the second half of August, so a more sustained change in direction is needed to draw any inference on market sentiment.
The Liv-ex Fine Wine 100 index has also been updated to reflect the reduced share of trade from Bordeaux. For the first time, wines from beyond Europe are included: Penfolds Grange 2008/9 and Opus One 2010. These wines also feature in the well-performing Liv-ex 1000, so could well be a positive influence on the Liv-ex 100.