In the world of fine wine investment, market movements are closely monitored, and recent trends indicate a noteworthy shift.
The rate of decline across Liv-ex’s three main indices is slowing, with this trend continuing into May 2024.
Liv-ex Fine Wine 100 Index
The Liv-ex Fine Wine 100, which serves as the industry benchmark for fine wine prices, experienced a decline of 0.6% in May, closing at 349.73. This marks an improvement compared to April's 1.3% drop. Notably, March had seen the first increase in the index in 12 months, hinting at a possible stabilization in the market.
Liv-ex Fine Wine 1000 Index
The broader Liv-ex Fine Wine 1000, which tracks 1,000 wines globally, also showed signs of a slower decline. It fell by 0.6% in May, slightly better than April’s 0.7% decrease. This index comprises several sub-indices, each reflecting different regions and categories within the fine wine market.
- Rest of the World 60: This sub-index showed positive movement, increasing by 0.8% in May.
- Champagne 50: The decline in the Champagne 50 was minimal, at just 0.2%, improving from the previous months' sharper declines of 0.9% in April and 2.2% in March.
- Italy 100: This index saw the steepest drop among the sub-indices, falling by 1.5% after a 0.7% rise in April.
- Bordeaux Legends: This sub-index decreased by 1.4%, following a flat performance in April.
Liv-ex Fine Wine 50 Index
The Liv-ex Fine Wine 50, which tracks the daily movements of the First Growths, dipped by 0.8% in May, a slower decline compared to the 1.3% fall in April. This further supports the observation that the rate of decline is easing across the main indices.
Performance of Individual Wines
Despite the overall downward trend, some wines have performed exceptionally well. In the Liv-ex 100, 34 of its component wines saw price increases in May. The standout performer was Joseph Drouhin, Montrachet Grand Cru, Marquis de Laguiche, 2020, which surged by 11.6%. Additionally, two Tuscan wines, Tua Rita, Redigaffi, Toscana 2020 (up 10.8%) and Tignanello, Toscana 2020 (up 5.0%), were among the top performers.
However, 56 wines in the Liv-ex 100 saw their prices fall, while 10 remained flat. Notably, in the Rest of the World 60 sub-index, two vintages of Sena, Aconcagua, were top performers: the 2012 vintage increased by 20.4%, and the 2017 vintage rose by 13.5%. Another significant performer was Screaming Eagle, Cabernet Sauvignon 2014, which secured a spot in the top five.
Liv-ex Indices Explained
The Liv-ex indices are essential tools for understanding the fine wine market:
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Liv-ex Fine Wine 100 Index: This index is the leading benchmark, representing the price movement of 100 of the most sought-after fine wines from France, Italy, the USA, Australia, and Spain. It has been a reliable indicator of market trends for over 20 years and is quoted on Bloomberg and Reuters.
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Liv-ex Fine Wine 1000 Index: The broadest measure of the market, this index tracks 1,000 fine wines from across the world. It includes seven sub-indices: Bordeaux 500, Bordeaux Legends 40, Burgundy 150, Champagne 50, Rhône 100, Italy 100, and Rest of the World 60.
All Liv-ex indices are calculated using the Mid Price, which is the midpoint between the highest live bid and lowest live offer. This method ensures the data reflects actual trading activity rather than mere list prices, providing an independent and reliable measure of the market.
Conclusion
The fine wine market, as tracked by Liv-ex, shows signs of stabilization with a slowing rate of decline across its main indices. While some indices and wines still face downward pressures, others are beginning to recover, indicating a complex but gradually improving market landscape. As always, investors and collectors should stay informed and consider these nuanced trends when making decisions.
Source: Liv-ex