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February 17, 2017 at 10:25 AM
Wine prices have been on a tear for 14 months, as measured by the Liv-ex 100 Fine Wine Index.
In fact, they are at their highest levels since October 2011, and the Live-ex index rose about 25% in 2016.
How much higher could the index go? Possibly another 18%, which would put the benchmark at its mid-2011 peak, according to Chris Smith, an investment manager, who recently spoke with Bloomberg News about wine prices.
With the drop in the British pound over Brexit and other concerns, shares in sterling-based wine contracts have become less expensive for overseas investors. In addition, some Chinese investors have moved back into the wine market.
Buyer Beware
Investing in wine indexes and interests can (ironically) be difficult due to limited liquidity in these investments.
The Vintage Wine Fund, for instance, had under $120 million in assets when it shut down in 2013 after weak results.
This was followed in 2014 by the closure of the Noble Crus Wine Fund and later Bordeaux Fine Wines.
While these investments were based outside the U.S., Premier Cru — a California-based wine investment operation — shut down in 2016 after some 4,000 investors lost as much as $70 million.
