Market Report - Vin-X · 2018-04-11 · 1.3 0.0-5.9 1.5-1.2 4.4 3.3 7.1 10.4 4.2-0.4 14.8-5.4 10.2...

Equities grabbed investor attention in February2018 with significant volatility in global financialmarkets and the comparative stable performance offine wine was brought sharply into focus in themonth. Trade on Liv-ex remained solid but all of themarket’s indices drifted slightly with the exceptionof the Liv-ex 1000, the broadest measure, whichgained 1.1%.

The most marked movement comparisons are theS&P500’s MOM performance of 5.6% growth at theend of January, to 1.5% at the end of February 2018and Gold’s MOM performance improving from -2.4%decline at the end of January to 1.2% positive growthat the end of February. This, no doubt reflected amove to a perceived ‘safe haven’ by some investorswhilst equities swung alarmingly early in the month.FTSE also saw a month on month decline from -2%in January to -4% in February 2018, so wine’s muchmore stable performance will certainly havebenefited those portfolios diversified into the asset.

Looking at the data over the 1 and 5 year periodsreported by Liv-ex, fine wine’s ability to protectwealth and provide a ‘safe haven’ is demonstrablybetter than gold and compares strongly with theFTSE 100.

March 2018

Market Report

Source: Liv-ex.com 28th February, 2018

Index

Liv-ex 50

Liv-ex 100

Liv-ex 50 0

Liv-ex 1000

Liv-ex Investables

FTSE 100

S & P 500

Gold

354

312

317

335

341

7,232

2,714

954

-0.1

-0.1

-0.1

1.1

-0.1

-4.0

-3.9

1.2

0.2

-0.2

0.3

1.3

0.0

-5.9

1.5

-1.2

4.4

3.3

7.1

10.4

4.2

-0.4

14.8

-5.4

10.2

13.0

21.8

30.2

17.7

14.0

79.3

-8.2

Level 28.02.18 M.O.M (%) YTD (%) 1 Year (%) 5 Year (%)

MARKET DATA:

FINE WINE DATA REVIEW

Figure 1: 2 Year Performance of FTSE100, S&P500, Gold, LX100 and 1000

Source: Liv-ex.com 28th February 2018

Market Report - March 2018

REGIONAL MARKET NEWS:

Bordeaux market share by value onLiv-ex recovered from its Januaryrecord low of 51.1% to 61.2% inFebruary. The in-bottle release of theprime 2015 vintage wines with keycritics publishing a series of positivescores certainly boosting Bordeauxbusiness.

Lafite Rothschild 2015 was the mostactively traded Bordeaux wine by valueon Liv-ex in the month, whilst fellow

3.7% increase in February 2018. The top five Burgundy movers in February 2018 are shown in figure 2 of this report and a more detailed lookat the Burgundy market can be reviewed in our February market report.

First Growth, Margaux 2015, continued to capture investor demand seeing its value lift to £11,900 per 12 x 75cl case at trade price. First Growthsecond wines Petit Mouton and Carruades Lafite 2015 were the second and third highest traded wines by value on the exchange.

Burgundy’s market share rose slightly again month on month to 18% due to the continued demand for the region’s top wines, whereas Italy andthe Rhone both saw a MOM market share decline to 5.7% and 3.4% of value traded on Liv-ex respectively from more active trading in January2018. That said the Italy 100 index rose 3.3% in February, having fallen to 1.5% in January, with some of the month’s top performers hailing fromthe Piedmont region.

PERFORMANCE:

Whilst the fine wine market appearedrelatively stable in February 2018 onthe whole, Burgundy experiencedsome volatility.

Liv-ex observed a closer correlation ofthe Burgundy 150 index to theperformance of financial markets. Theindex has undulated since the latterpart of 2017 with November seeing anaverage 8% gain, a fall of 4.7% by theend of January and a subsequent

MARKET NEWS:

Wine

Rousseau, Clos St Jacques

Leflaive, Puligny Montrachet Pucelles

Leflaive, Puligny Montrachet Clavoillon

Rousseau, Chambertin

Bonneau Martray, Corton Charlemagne

2007

2014

2011

2009

2009

£4,000

£2,000

£1,000

£14,236

£985

£5,308

£2,455

£1,200

£17,018

£1,167

32.7

22.8

20.0

19.5

18.5

Vintage January ‘18 February ‘18 Change %

Figure 2: Major market movers: Burgundy

Source: Liv-ex 28th February 2018

Wine

Antinori, Guado Al Tasso

Conterno, Barolo Riserva Monfortino

Gaja, Barbaresco

Solaia

Conterno, Barolo Cascina Francia

2005

2008

2006

2007

2006

£720

£6,350

£1,227

£1,409

£1,836

£818

£7,150

£1,369

£1,545

£2,009

13.6

12.6

11.6

9.7

9.4

Vintage January ‘18 February ‘18 Change %

Figure 3: Italian top movers


Neal Martin’s move to Antonio Galloni’s Vinous.comwas breaking news earlier in the year, but as yet therehas been no tangible effect and in terms of criticalopinion, it appears to be business as usual, despite hisscoring of the 2015 vintage appearing on the TWA asa guest article. His first report for Vinous being hisreview of the 10 year on scoring of the 2008 vintage.

Super Tuscans Ornellaia and Sassicaia have releasedtheir 2015 vintage wines this month. To celebrate the30th vintage of Ornellaia and the 10th anniversary ofits `Vendemmia d’Artista project’, the Bolgheri estateinvited the renowned South African artist, WilliamKentridge to create a spectacular commemorative label.Meanwhile, James Suckling has scored Sassicaia 2015,98 points and the wine is due to be shipped thissummer. No doubt both will be in demand.


Last month’s ‘Critic’s View’ focused on James Suckling’s scores ofthe important 2015 vintage.

Important because this is the first Prime vintage since the iconic2009 and 2010 vintages and because it is living up to en primeurpredictions. As the vintage’s wines are now being traded in bottle wefeature a round-up of all of the 2015 wines awarded 100 points bythe industry’s most influential critics.

Notably, Canon, Haut Brion, Margaux and Petrus were consistentlyawarded perfect scores from four key critics. Liv-ex members votedMargaux the ‘wine of the vintage’, the added cachet of it being thelast vintage of the Chateau’s great former wine maker, Paul Pontallierwith a commemorative bottle label featuring the Norman Fosterwinery completed that year makes it a significant collector’s item.

Critics key: Neal Martin (NM) James Suckling (JS)Jane Anson (JA) Antonio Galloni (AG)Jeb Dunnuck (JD) Lisa Perroti-Brown (LPB)

In bottle scores were published in February 2018, en primeur in 2016

CRITIC’S VIEW - BORDEAUX 2015


Wine 2015Critics scoring100 points in

bottle

Critics scoring100 points en

primeur

Petrus

Margaux

Canon

Haut Brion

Vieux Chateau Certan

Lafleur

Figeac

Belair Monange

Evangile

Le Pin

Mission Haut Brion

Palmer

Pavie

Trotanoy

Trotteveille Vv

Beausejour Duffau

Ausone

Mondotte

Cheval Blanc

Eglise Clinet

JS, JA, LPB

JS, JA, JD

JS, AG, NM

JD, LPB, NM

JS, AG

JS, JA

JA, JD

JS

JS

JS

JS

JS

JS

JS

JS

JS

JD

JD

LPB

JA

JS

JS

JS

-

-

JS

-

-

-

-

JS

-

JS

JS

-

-

JS

-

-

-

Pick of the month - CHATEAU LAFITE ROTHSCHILD 2014

If we look behind that headline data it’s worth notingthree things in particular:

■ Lafite 2014 has momentum on its side, showing upnearly 50% in the last two years but, as this graphshows, there’s still significant room for growth.

■ Chateau Lafite Rothschild remains the mostsignificant brand in Bordeaux.

■ Mid quality vintages such as this have, over the longterm, been the best performers in the market. WhileVin-X firmly expect that over the next decade or soprime vintage wines will be the best sector to hold, itpays to hedge.

LIMITED AVAILABILITY NOW: Contact us for moreinformation on 0203 384 2262. Source: Liv-ex.com

Lafite 2014 vintage comparison

First growth, Lafite 2014 is one of the best value plays currently available in the fine wine market, and one of the simplest investment argumentsto make. There is, in our opinion, not much need to look beyond the significant discount it trades at compared to similarly priced back vintages.

Château Margaux

Property investment specialist, Knight Frank published its 2018Wealth Report in March providing an update on the performance ofglobal property markets and an insight into the current investmenttrends of the world’s ‘Super Wealthy’.

The report includes the findings of the Knight Frank’s AttitudesSurvey 2018, based on the responses of over 500 of the world’sleading private bankers and wealth advisers, who between themrepresent about 50,000 wealthy individuals with a combined wealthof over US$3trillion. We are particularly interested on the section ofthe report which looks at investment in alternative assets and inparticular those classed as Passion Investments. This year’s surveyreports a 29% growth in exposure to alternative assets, including finewine, by UHNWIs (ultra-high net worth investors).

When broken down the most significant territories are Australasiawith 53% growth, North America 46%, Europe 38%, Russia 27% andAsia 22% during 2017. This may be in part due to an increasedappetite to extend the risk profile on investments with a globalaverage of 38% of these investors being classed as happy to takemore risk.

Private wealth, especially that represented by Family Offices, isbecoming increasingly sophisticated in their investment approach.Andrew Duggan, Head of Capital Markets Research at Knight Frankstates that “The 1990s were all about the wave of institutional capitalhitting real estate markets. That was followed by waves of privateequity and sovereign wealth capital. The next ten years will be aboutthe impact of private wealth.”

Our observations would concur that investors are seeking greatercontrol over their investments and see diversification into alternativeassets as an important strategy.

Looking forward, Knight Frank research points to furtherstrengthening of global economic growth in 2018. The InternationalMonetary Fund is predicting 3.7% expansion, which would be thehighest level of growth since 2011, if it transpires. Knight Frank ChiefEconomist, James Roberts, states that “In this context UHNWIs needto think of moving away from safe haven investments and towardsrisk-facing assets, which typically perform strongly in cyclicalupswings.”

Property continued to be an important sector for UHNWIs in thecontinued global low yield, low return environment. The year saw anotable move away from hedge funds, and in early 2018 there areongoing concerns around perceived stretched valuations in bondmarkets and how much longer will the record-breaking equities rallyrun for? 2017 saw stock markets enjoy significant highs with US taxreforms a key influencing factor, not unsurprising then that 62% ofthe Wealth Manager respondents confirm that their UHNW clientshad increased their exposure to equities in the year.

This annual report also looks at investment in ‘Passion Assets’ suchas classic cars, fine art, jewellery, coins and fine wine. Last year’s2017 Wealth Report showed that fine wine was the top performingPassion Asset in 2016 with growth of 24%. In 2017 fine wine ispushed to second place by fine art, with the Knight Frank Fine WineIcons Index recording 11% growth.

2017 was an extraordinary year for fine art, with the sale of Leonardoda Vinci’s Salvator Mundi blowing all previous records raisingUS$450million (including the auction house’s $50millioncommission). A second significant art transaction in the year of Jean-Michel Basquiat’s ‘Untitled’, for US$110.5million, secured anotherlandmark sale and the ripple effect raised fine art to the top of thePassion Assets ranking last year.


SPECIAL FOCUSTHE KNIGHT FRANK WEALTH REPORT 2018

Continues over...

Salvator Mundi, Leonardo Da Vinci

Fine art

Classic cars

Vintage watch

Jewellery

Chinese ceramics

Furniture

Fine wine

Sotheby’s US$450M

Bonhams US$15.6M

Sotheby’s US$18M

Sotheby’s US$22.5M

Philips US$17.8M

US$71M

US$40M

£5.3M

£198,000

£192,000


Continues over...

Sterling dynamics in 2016 had a positive impact on the priceperformance of fine wine and Brexit was a significant trigger. Sincesummer 2017 the currency effect caused by Sterling’s devaluationdropped away and this may well account for the more moderategrowth in the Knight Frank Fine Wine Icons Index in the latter half ofthe year, compiled by Wine Owners.

The report did point to the stronger performing Burgundy marketwhich saw a rise of 16.5% in 2017, off the back of ‘insatiable demandfor the top wines and a series of short harvests.’ “…buyers in the FarEast have extremely sophisticated tastes and an ever-increasingdepth of knowledge, which makes it an exciting time for buyers andsellers alike.”

Over longer-term periods of 2, 5 and 10 years, fine art does not havethe sustained performance of the normal class leaders, classic carsand fine wine, which are ranked first over ten years at 334% growthand second, at 192% respectively.

Class Item Value achieved in 2017

Highlight Passion Asset sales in 2017 included the following:

Salvator Mundi, Leonardda Vinci

1995 McLaren F1

1959 Ferrari 250GTCalifornia Spider LWB

1956 Aston Martin DBR(raced by Stirling Moss)

Paul Newman’s RolexDaytona

Pink Star (59.6 carat pink diamond)

1,000-year old Ru guanyoceramic bowl

Four rare ChineseHuanghuali folding chairs

Domaine de la RomaneeConti, Romanee Conti1988 (12 x 75cl)

Chateau Cheval Blanc1947 (1 x 6 litre bottle)

Fine wine is certainly a more accessible investment, and the activesecondary market with established exchanges such as Liv-ex.comprovides clear provenance, price transparency and investmentliquidity. The other Passion Assets do not enjoy similar levels of thesebenefits, in part because of the singular nature of many of theseassets and the challenge then to value them.


The tables below provide the results from the Knight Frank 2018 Attitudes Survey undertaken by Wealth X within the report:

A – D SOURCE: Knight Frank Wealth Report 2018, Attitudes Survey; wealth distribution data provided by Wealth X.

To read the Knight Frank Wealth Report 2018 in full please visit: http://www.knightfrank.com/wealthreport

A. How did your clients’ exposure to the following asset classes change over the last 12 months?:

Asset

Alternative assets

Equities

Property

Private equity

Cash

Crypto currencies

Gold

Bonds

Africa Asia Australasia Europe LatinAmerica

Middle East

NorthAmerica

Russia GlobalAverage

9%

26%

12%

12%

26%

24%

3%

15%

22%

78%

19%

44%

24%

5%

7%

21%

53%

41%

35%

41%

47%

6%

18%

-18%

38%

52%

42%

44%

17%

6%

10%

-4%

19%

62%

76%

48%

29%

33%

5%

19%

22%

48%

30%

22%

33%

7%

19%

7%

46%

66%

61%

76%

46%

20%

17%

0%

27%

45%

45%

27%

9%

27%

45%

9%

29%

52%

40%

39%

29%

16%

15%

6%

B. On balance how has the wealth of your clients changed over the last 12 months?

Increased

No change

Decreased


Middle East

NorthAmerica


57%

16%

27%

88%

8%

4%

91%

9%

0%

74%

23%

3%

61%

30%

9%

57%

29%

14%

94%

2%

4%

54%

38%

8%

72%

19%

9%

C. What percentage of your clients actively collect an investment of passion such as art, wine, jewellery, watches or classic cars?


Middle East

NorthAmerica


23% 28% 40% 41% 35% 44% 37% 47% 37%

D. Please rank the importance of the following factors to your clients when buying investments of passion

Asset

Joy of ownership

Capital appreciation

Safe haven for capital

Portfoliodiversification

Status with peers


Middle East

NorthAmerica


2

1

3

4

5

2

1

4

3

5

1

2

4

3

5

1

2

3

4

5

2

1

3

4

5

1

2

4

3

5

1

2

3

4

5

1

2

3

5

4

1

2

3

4

5

VIN-X SPONSORS CHATEAU IMPNEY HILL CLIMB7 – 8TH JULY 2018

www.vin-x.com • email: [email protected] • Tel: 0203 384 2262 • Vin-X Limited, Barclays House, 51 Bishopric, Horsham, West Sussex, RH12 1QJ.

LONDON • BORDEAUX • HORSHAM • BURTON-UPON-TRENT

Vin-X Fine Wine Market Reports:Vin-X regularly produces specialist market reports providing detailed information for fine wine investors. Visit our website www.vin-x.com for details.


Investment in fine wine is all about performance. I believe in it so much I joined the team in 2011.Austin Healey, Leicester, England, British Lion.

Proud sponsor of the Financial Planner Awards 2017

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Following our superb experience of the Chateau Impney Hill Climbin 2017, we are delighted to sponsor this year’s event taking placeat Droitwich Spa, Worcestershire this summer.

The Hill Climb event features over 200 contestants driving a rangeof stunning and priceless classic cars over a course set in ChateauImpney’s beautiful grounds. This year there is also a spectacularSuper Car Expo with over 100 of the most powerful and valuablehigh-performance cars.

We will be hosting wine tastings, bringing together the two top

performing passion assets, and there are plenty of visitor attractions

to enjoy across the weekend. Contact us now on 0203 384 2261 for

discounted tickets for the Hill Climb 2018 and to join us at one of our

exclusive wine tastings in the Chateau.

For more information about the Chateau Impney Hill Climb 2018

please visit: http://www.chateauimpneyhillclimb.com

Market Report - Vin-X · 2018-04-11 · 1.3 0.0-5.9 1.5-1.2 4.4 3.3 7.1 10.4 4.2-0.4 14.8-5.4 10.2...

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