Buoyant January fuels fine wine investment optimism

Wine Asset Managers has recorded minimal amounts of growth in its fine wine funds over the course of December but is already reporting a buoyant January.

The company believes that healthy conditions will return to the market in 2010 and beyond, driven by Asian demand and a US recovery.

“We are optimistic that 2010 will see a positive return and that compound returns will be strong as the years unfurl,” noted WAM in its latest monthly report.

It also drew attention to the focus of future demand. “For our purposes it is no longer appropriate to refer to the emerging markets of Asia, as Chinese demand is now a major driving force. The impact of this is evident in the price performance of various Lafite vintages over the last 2-3 years," it said.

Referring to other leading labels it added: “Most other first growths are still well below pre-crisis price levels and those prices will certainly recover. The low production mega-brands of the right bank are also below pre-crisis levels and performance has started to return.   

In conclusion it forecast: “Asian demand will branch out into other brands, and we believe we are at the nascent stage of a phenomenal increase in wine appreciation from that region.

"The negative impact of subdued US demand is barely being felt as a result, while in the medium term a return to growth in US wealth can only be positive.”

The Fine Wine Fund’s unit price of the fund finished the year at £12,514, a movement of 0.5% for the month and 8% for the calendar year, while The Fine Wine Investment Fund’s unit price of the fund finished the year at $905, a movement of 0.4% for the month and 8% for the calendar year.

Patrick Schmitt, 28.01.2010