Chips with everything

Top clarets perform best in 2004, though a weak dollar continues to dampen overall performance

ACTIVITY in the shortened month of December was steady, without being spectacular.  Trade through the exchange was down on November, but up 21% on last year.  For the year as a whole, trade on the exchange was up 70% on 2003.

The market, however, continued to be dogged by a weak US dollar.  Price performance at an index level is summarised in our chart (top right).  Our best performing index in 2004 was the "Claret Chip", comprising the 33 Bordeaux First Growths since 1982 that have at least 95 Parker points.

It would seem sensible to stick only to the very best wines when speculating.  Indeed, in 2004 the more concentrated the basket of wines, the better the chance of making a positive return. For the Liv-ex 500, only 37% of wines appreciated in the year, while 50% showed gains for the Liv-ex 100 and 61% in the Claret Chip index.

The latter was up 10% (17% in US$), outperforming both the FTSE 100 and S&P 500.  The table below shows the major movers, year on year, in 2004.  It is interesting to note that only one wine from Bordeaux 2000 (Lafleur) made it into the top 20 in 2004.

This contrasts with 2003, when 2000s took 11 of the top 20 spots. In fact, in the last 12 months, 2000s accounted for half of the bottom 10.  At the top of the list were Rieussec, Krug 1990 and Cristal 1996.

The balance of the top spots were reserved for investment-grade drinking claret.  The Haut Brion stable did particularly well, filling five of the top 20 spots.  Many of these were upgraded by Parker in a special tasting earlier in the year.