WineFi Weekly

Welcome to the fifteenth edition of WineFi Weekly👋 
📅 July 1st 2024

Interested in building a fine wine portfolio? Click here to book a call.

First syndicated deal - The Champagne Collection - reaches capacity

We are pleased to announce we have reached our target number of investors and so have now closed applications for the Champagne Syndicate.

If you’re interested in receiving first refusal of our next opportunity please do sign up to the syndicate at syndicate.wine.

What’s happening in the wine investing world?

The Liv-ex Indices - A True Representation?

If you look at the Liv-ex indices alone, they paint a fairly negative picture of the fine wine market.

📉 The Liv-ex 1000, down 19.3% over two years.

📉 The Liv-ex 100, down 14.6% over two years.

The team at WineFi conducted extensive data analysis to find out how a portfolio could have bucked this trend.

We found the characteristics of the winners of the last 3 years, and we ran thousands of simulations - randomly picking from a basket made up of wines from the right regions and producers, that are the correct age, and that we judged were liquid enough to be a viable investment.

1000 times, we randomly picked £1,000,000 worth of wine from this basket and the returns were as follows.

📈 An expected annual return of 12.6%, with a volatility of 1.6%.

Obviously past performance is not indicative of future returns, but what this does prove is that the wine market is not completely beholden to what the major indices say it is doing.

Sauternes - intra region diversification?

Over the past two years, the Sauternes 50 has outperformed all other components of the Bordeaux 500. While the Bordeaux 500 dropped by 13.2% since June 2022, the Sauternes 50 managed to rise by 1.7%, demonstrating its resilience in a declining market.

However, between mid-2020 and mid-2022, the situation was reversed. During this period, the Bordeaux 500 saw a sharp increase of 25.6%, while the Sauternes 50 only gained 1.7%.

In summary, the Sauternes 50 has shown more stability against market fluctuations compared to other sub-indices within the Bordeaux 500. Therefore, Sauternes may offer appealing opportunities for buyers seeking lower-volatility investments during uncertain times.

The Wine Market as a whole

This week, Bordeaux dominated weekly trade, accounting for 40.2% of the total trade by value. Numerous wines from the region, including several vintages of Chateau Lafite Rothschild, were among the most-traded both in terms of value and volume.

Burgundy trailed behind with a trade share almost half of Bordeaux’s, taking 21.4% of trade, slightly up from last week’s 18.5%. Champagne’s trade share kept declining, falling from 8.0% to 6.3% of trade this week. The region was overtaken by Tuscany, the USA and the ‘Others’ category, despite Dom Pérignon 2012 featuring among the most-traded wines by volume.

Tuscany and Piedmont both saw their trade shares fall week-on-week, to 7.9% and 4.4% respectively. A Tuscan Brunello di Montalcino led trade by volume this week, buoying the region’s trade share. 

The ‘Others’ category also took a dip, falling from 17.8% to 9.4% of trade this week, despite a high value whisky trade. The Rhone and the USA, on the other hand, both recorded an uptick in their trade shares, to 3.0% and 7.5% respectively. 

Source: Liv-ex