Liv-ex 50 Report May 2016

Posted by Cult Wines on 20 May 2016 |

Liv-ex 50 Report May 2016

 

Unlike En Primeur campaigns over the last few years, interest in physical vintages of the Bordeaux 1st Growths has continued throughout. With this demand comes growth.

Liv-ex 50 hit its lowest point since December 2009 on the 20th  November. Since this point the index has posted month-on-month positive gains and has improved an impressive 9.46%. This turn of favour more-or-less coincided with the time at which the total value of bids on Liv-ex overtook the total value of offers, illustrating an undisputable increase in demand for the five estates. The last time the index saw six months of consistent growth was from September 2010 to March 2011.

 

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Prime vintages (highest rated four vintages, unless below 97 from Wine Advocate) have returned an average of 6.9% over this period, with just one – Latour 2005 – showing negative  at -1%. Haut Brion 2010 led the way with 16%.

 

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Lesser vintages have returned an average of 12.6% over this period, with Margaux 2006 lagging at 4% and a staggering 20% from Lafite 2011, Lafite 2012 and Haut Brion 2003.

 

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Of the five First Growth estates, Haut Brion has performed the best in prime vintages, with an average 9.50%; and Lafite in lesser vintages with 14.67%. Mouton has been the most consistent high performer, returning 12.9% across all vintages. Despite falling last in all three categories, Latour vintages still averaged 7.0%.

 

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Prime vintages 2005 and 2009 have been the slowest movers but still boast reasonable gains for a six month period. Interestingly, the two vintages that have performed the best are 2011 and 2012, which were released at high prices during the Bordeaux correction to very little initial interest. Both vintages saw general decline (with a few notable exceptions) until last year before joining the recovery.

 

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*Latour 2012 yet to be released so not included in the average.

 

Bordeaux has benefitted most from the current market conditions with the five 1st Growths  leading the charge. The drawn out En Primeur campaign may be a blessing in disguise, as it has maintained a steady flow of demand for the physical vintages and kept the Liv-ex 50 index ticking along at a good pace.

 

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