The Wine Collector

WinePrices.com's wine price indexes continued to rise strongly in October based on 14 auctions worldwide, three of which were in Hong Kong. Of US$25.8 million in proceeds from these auctions, US$13.2 million or 51% was spent in Hong Kong.

The top three most actively traded fine wine indexes were up 8%-14% in October after increasing 9%-12% in September.  These indexes are up a stunning 44%-64% year to date.  Wine investors with the stomach to have invested when the economic outlook was bleak are now being amply rewarded.

See below for a table of key stats on all of the indexes and the full summary results page for trading metrics information (and archives from prior months).  Note: each index equaled 100 as of January 2005.

Observations

• Investment grade Bordeaux, which continues to experience high demand from Asia, is leading the pack in terms of returns.
• Positive year-on-year growth - The majority of indexes are now in positive territory when measured on a year-on-year basis.
• The California 100 index has shown little appreciation over the past five years (in last place based on its index value) and it's been the worst performing index year to date.  I suspect major contributing factors are the weak U.S. economy and relatively tepid international demand for the wines which comprise the California 100 index. Historically, virtually all of these wines were sold to oversubscribed mailing lists comprised largely of U.S. wine collectors and enthusiasts.  Now that wine auction demand is shifting towards Asia, the relative lack of exposure and access to California's top brands among Asian wine collectors is hurting these brands' secondary market price performance.  U.S. wines, in general, are relatively hard to find in Asia and most brands seem to be ignoring the opportunity (if the U.S.'s very minor presence at the recent Hong Kong International Wine Fair is an indication of interest).
• Vinfolio's Asian experience confirms these trends.  The first of five offers drawn from a US$3+ million cellar that we began offering yesterday through our U.S. and Hong Kong offices is already 75% sold out in 24 hours with the majority of the spending derived from Asia.