The fluctuating stock markets so far this year have sent people foraging to find alternative investment options. Although unconventional, wine investments have seen high participation over the past year, thanks to the impressive price rises and the growing population of the ultra-wealthy. With a more than 9% year-over-year rise in the number of ultra-high-net-worth individuals over the past year alone, it's no surprise that the demand for fine wine is on the rise.
The Wine Brand That Produced More Than 100% Returns
The 2019 Château Lafite Rothschild wine saw a 104% rise in prices over the past year alone. This increase compares to the U.S. benchmark S&P 500 index’s 2.95% decline over the past year. The blue-chip red wine, or claret, is currently valued at $1,096 as of June 2022, up from $536 in the same period last year. Lafite, one of the top five wine-producing chateaus of Bordeaux, is currently one of the best producers of expensive red wines globally. It was rated the “leader among fine wines” by the Universal Paris Exposition in 1855.
Why The Sudden Increase?
Lafite is globally considered as some of the best fine wines produced in Bordeaux County and has the best ranking for quality and longevity among the top five Châteaux. The 2019 Château Lafite Rothschild got 100 points from Willian Kelly, according to The Wine Advocate’s latest report on Bordeaux wines. In addition, the blue-chip Bordeaux was the leading “First Growth” price performer in 2021, as fine wine trading gained traction. As a result, the average weekly trade volume of fine wine rose sharply. In the last week of June, the 2019 Château Lafite Rothschild was the most traded wine.
Bordeaux wines are historically the highest traded in the secondary markets, as collectors often store the bottle for years before reselling it. As the fine wine market picks up pace in the coming months, the 2019 Château Lafite Rothschild should witness further price appreciation.
Today's Alternative Investment Highlights
- Wine investment platform Vint is set to launch its largest offering to date this week -- Bordeaux En Primeur 2021 Collection at $50 per share. Merlot yields in the Bordeaux region were impacted by cold temperatures and early frost in 2021, leading to lower volumes and higher demand for the vintage.
Photo by TY Lim on Shutterstock
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