Fine Wine Index Overview
WinePrices.com introduces the WinePrices Fine Wine Indexes, the most representative and comprehensive fine wine indexes publicly available. WinePrices currently tracks 9 different portfolios of fine wines, with 2 internationally balanced and 7 regional specific indexes. Wines that make up individual indexes are the most actively traded fine wines bought and sold at global auctions.
Individual wines are selected based on a combination of their month-to-month sales consistency as well as their absolute frequency of auction sales. For regional indexes, only wines from the respective region are included.
- Number of wines in each index:
This is driven by the trading frequency of wines from each region. For example, relatively few ports are traded consistently so this limits the size of that index.
- Initial trading history:
Each wine appearing in the initial index must have sold at auction in a 750ml size during the first quarter of 2005. This ensures an initial trading history of over four years.
Wines whose trading activity slows are candidates for removal and more frequently traded wines will replace them from time to time. record of all substitutions (with the date of removal) will be provided at the bottom of each index's detail page.
Index Calculation Methodology and Trading Metrics
- Equal weighted index:
Each wine's percentage price movement is weighted equally with any other in the same index.
- Updated monthly:
Each index is calculated monthly based on global auction results in that month.
- Volume-weighted average prices:
For each wine that trades during a month, the total value of all 750ml transactions (inclusive of the buyer's premium) is divided by the total number of bottles purchased to determine a volume-weighted average price.
- Handling of no monthly trades of a wine:
If a given wine has no auction trades in a month, its price used in an index calculation shall be carried forward from the immediately prior month. In Q1 2005, for any wine which did not trade in each index's starting month of January 2005, its initial price level is carried back to January from February or March 2005.
- Trading volume metrics:
Each index's component activity percentage measures the percentage of that index's components which trade in a given month. Each index also measures the average number of lots traded per active component by dividing the total number of auction lots for the respective index's wines sold during a month by the number of component wines which traded in that month.
- U.S. dollar calculations:
All prices used in the indexes are calculated in U.S. dollars. Prices from non-U.S. auctions are converted into U.S. dollars based on the USD exchange rate on the date of the auction.