Bordeaux: A trip to the land of fine wine

Bordeaux wines are the most extensively tracked wines in the world because of their importance to the market. The wines are rated three times before they ever reach the consumers, twice before the wines are bottled.

The name Bordeaux is synonymous with wine investments. This is attributable with the rich history and strategic location of the region. Red Bordeaux wine has an established resale past and is primarily the investment medium. Red Bordeaux remains the leading investment grade for wine auction prices. Also, the value of a Bordeaux wine is more readily identifiable, the 150-year old 1855 classification providing a framework for evaluating wine most widely held and traded.

Through centuries, the top Bordeaux wines have proven an exceptional ability to live long lives. IT is the foundation of their attractiveness among consumers and the foothold of their success among investors. A 50-year-old Bordeaux are as young and vibrant today as the day they were released. Bordeaux’s amazing ability to age enables investors to trade these wines repeatedly, from collector to investor, to finally an end consumer who is willing to pay up for a distinct rarity of the best Bordeaux.

The longevity and predictability of Bordeaux give collectors and investors the conviction that young wines will age gracefully and be worth more in the future, and gives them the confidence to buy and hold other vintages, knowing that they will improve in flavour and appreciate in price. History has shown that investment-grade Bordeaux dependably trends higher with the passage of time. Ultimately, no other region can be proud of so many wines that possess both the longevity of Bordeaux and the huge, established market for back-vintage wines.

As a result, as of 2008, the 118 Bordeaux chateaux account for 90% of the entire dollar volume in the investment-grade wine market, which includes the finest wines from every other region in the world. Amazingly, 25 of Bordeaux best chateaux account for approximately 80% of the dollar volume in the industry.

In fact, the new index Liv-ex Claret Chip Index, that is comprised of only the best, the Bordeaux Left Bank First Growth, has outperformed not only the Liv-ex 500 and Liv-ex 100 indices, but also the S&P 500 and FTSE 500 indices. This is evident in the graph showing the relative prices of the mentioned indices below.

We at Assetton primarily trade the region’s First-Growth wines that have the best winegrowing potential including Haut Brion, Lafite Rothschild, Latour, Margaux and Mouton Rothschild. These are the most sublime, sought-after luxury goods in the world, with the most solid, bankable track record.

Source: David Sokolin and Alexandra Bruce’s Investing in Liquid Assets: Uncorking Profits in Today’s Global Wine Market, Liv-ex, Bloomberg