Bordeaux Wine Investments
 
Bordeaux wine investments have generated handsome returns because of a few simple reasons:


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Supply is limited due to the classification system enacted in Bordeaux in 1855 which limits the top chateaux from increasing their vineyards with top terroir.
   
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Top chateaux sell their wines in tranches, increasing their prices month-by-month, year-by-year.
   
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Global demand is rising as increasing numbers of collectors (Europe, USA, Russia, Middle East and Asia) seek to buy and consume these wines.
   
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Top Bordeaux wines have a lifespan of 30 to 100+ years. Over time, consumption cuts down on available supply. This demand and supply imbalance results in inevitable escalating prices.
   
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Moreover, the largest, most liquid secondary wine market in the world is in Bordeaux wines, with prices determined by auction houses, chateaux and wine trading houses.
   
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The ratings given by wine journalists and experts such as Robert Parker Jr. influence demand and prices.
   
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 And to top it off, there is the international social prestige of Bordeaux wines.


Certainly, there are other high quality wines from outside Bordeaux, but the fact is that according to industry experts, less than 1% of all wines worldwide are investment grade and Bordeaux wines make up the majority of this.

Since the 1980s, good Bordeaux investment wine portfolios, as a capital asset, have performed well when compared to traditional equity and fixed income securities with low correlation to these traditional investments. The WGF Investment Wine Index* shows very strong absolute and relative performance since 1987. It is notable that there has been steady growth with very few downward movements in the WGF Investment Wine Index. Correlation between the performance of the WGF Investment Wine Index and selected equity and fixed income indices is low, suggesting that investment wines offer genuine capital asset diversification. It is important to note that the WGF Investment Wine Index comprises wines that meet the Investment Managers’ strict investment criteria and that stock selection is as important in Investment Grade Wine section as it is for equities. It is important to buy the right wines from the best vintages at the correct price and time. A blanket wine purchasing approach is unlikely to achieve the same appreciation or results.