- Italy 100 Liv-ex index recorded a positive return while other regions Liv-ex sub-indices declined in the first half of 2019
- Market activity in Italy increased (total share of volume traded on Liv-ex)
- We see opportunities across both Piedmont and Tuscany in Italy
- Cult Wines Piedmont index performed better than our Tuscany/Brunello index
- In producers, Giacomo Conterno led the gain in the near-term performance
- Super Tuscans offer higher relative value than top Bordeaux and deliver consistent returns
In 2018 most of the wine region indices finished the year on a positive note, especially Burgundy, which delivered a significant +34.8% return and hit a record high level of 600 in November of last year. However, market data from the end of 2018 and early 2019 have indicated a broader-based cooldown in the fine wine market.
We expect growth for these regions to continue this year, but at a slower pace. Considered as a lower-risk region, Italy maintained its momentum and can potentially provide investors with a safety cushion in case of higher volatility in the wider wine market.
As the wine market sentiment becomes more defensive on regions which have performed very well recently, we believe that it’s time to shift our focus to undervalued regions such as Italy, which is on an upward trend despite some potential uncertainty ahead. Within the broadest Liv-ex 1000, sub-region indices such as Champagne 50, Bordeaux Legend 50 and Burgundy 150 have all declined in value so far this year. For investors, the 8% return of the Italy 100 over the same period stands out in the broader wine market, demonstrating resilience. This could suggest that Burgundy and Bordeaux are no longer the exclusive hunting grounds of wine collectors and investors. As the wine market becomes more diversified, regions such as Rhone and Italy, which remained largely untapped, are attracting investors who have traditionally not invested outside Bordeaux or Burgundy.