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Opportunities for vintage growth

Christopher Silvester

Wednesday, 11th June 2008

Christopher Silvester says you don’t have to be rich to invest in fine wine, and the rewards can be handsome

My own experience in the market has been a happy one. I bought a portfolio of Bordeaux wines through Premier Cru in 2001 for £2,879. When I chose to exit the market a couple of years later, I pocketed a tax-free profit of around 40 per cent. Stacey-Lea Golding has tracked my portfolio since then and in May of this year it was worth £10,355, which represents a total tax-free profit to date of 260 per cent, an average annual growth of 37 per cent and an average compound growth of just over 20 per cent. I still hold an imperial (the equivalent of eight bottles) of Château Margaux 1996, which I bought for £1,500 in March 2001. Its value this May was £4,000, showing an overall growth to date of 167 per cent, an average annual growth of 24 per cent and an average compound growth of 15 per cent.

The 2007 Bordeaux vintage has proved disappointing, which is bad for the Bordelais though no bad thing for the investment market. Asian buyers have been concentrating on the post-1999 vintages — they want the condition and appearance of cases and bottles to be immaculate — with the result that some older vintages currently represent a buying opportunity. For example, Château Margaux 1990 — a superlative year from that house — is trading at a discount of 15 per cent to the 2005 vintage, or 50 per cent when adjusted for maturity.

As I said, wine investment does not have to be a rich man’s game; but it can certainly lead to your gradual enrichment.

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U.S. Investor

June 12th, 2008 11:25pm

Christopher, great article. Have you done research on funds found in the US? I could not find your email here...

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