The year 2017 looks set to be a promising one as far as fine wines go. Aside from purchasing for consumption, if you can resist the lure of uncorking the bottle, it is also a good idea to buy some for investment purposes.
Aarash Ghatineh is global head of sales at Cult Wines, one of Europe’s largest wine investment companies. The industry veteran presents a list of what to keep an eye on should you decide to expand your collection.
Second is first
The common thread between these two names is that they are both second wines of their respective first growths from Bordeaux. But they are worth highlighting because buying into this tier has been a very successful strategy for wine investors after the Bordeaux market hit a low in June 2014. Since then, Cult Wines’ Second Wine Index has increased by 63.4 per cent.
The Grand Vin Haut-Brion is doing very well in the market at the moment, and it is believed that its popularity will filter down to its second label, the Clarence de Haut-Brion. Although prices for the other second labels of Bordeaux first growth have been climbing, the Clarence could be the next to take off. It has all the credentials to follow the same pattern of its peers, which could represent growth of more than 50 per cent over the next three years across a range of vintages.
Le Carillon de L’Angelus is another second wine to watch. It typically has a production of under 1,000 cases, but receives high scores while costing a fifth of the price of the Grand Vin. Angelus has a strong following in all consumer markets, and since the reclassification to Premier Grand Cru Classé A in 2012, it has been one of the best-performing Bordeaux wines.
While the second wine strategy has been immensely popular within Bordeaux, the pattern of buying into a brand’s more affordable labels can also be applied to other regions. A well-diversified portfolio should have exposure to Second Flight, the second wine of Screaming Eagle, and The Maiden, the second wine of Harlan Estate, both of which come from California.
Iconic vintages of Bordeaux
Specifically, zero in on the top wines from the 1990, 1995, 1996 and 1998 vintages. For instance, the Chateau Margaux 1990 is recognised as the greatest Margaux ever produced with a record seven times 100 points rating from Robert Parker. Stock is becoming severely depleted as these wines hit their sweet spot for consumption. Although the 1990 is one of the most expensive vintages for the estate, it is also the top rated, the most highly sought after and difficult to access. Undoubtedly, the laws of supply and demand have stood the test of time in most markets, and this is the most sustainable factor that drives the increase in the price of a wine.
Burgundy’s 2015 vintages
This group of wines is going to be released in the first quarter of 2017 and is already making waves among wine investors, collectors and consumers. The quality is somewhere between that of the vintages of 2005 and 2010, both of which have the potential to be legendary for the region. Among the producers, those worthy of being spotlighted (and that were previously under the radar) include Domaine Duroché, Domaine Georges Lignier, Domaine Hubert Lignier and Thibault Liger-Belair.
Bearing a high potential to become the Burgundy of Italy, Italy’s Barolo is one to watch as there is established and emerging talent from this region that needs to be explored by wine investors. In addition to the usual producers of Bruno Giacosa, Giacomo Conterno and Luciano Sandrone, others worth watching out for this year include: Roberto Voerzio; Renato Ratti; Domenico Clerico; Vietti and Paolo Scavino.
Do not let its relatively unfamiliar name fool you. This is actually the fifth-growth estate owned by the legendary Château Mouton Rothschild. While its parent company needs no introduction, Clerc Milon might require one. To date, the label has risen in popularity in Asia as its low availability has led to a spike in demand. Hold it for up to five years and its growth is forecasted to be up to 100 per cent. Clerc Milon ranks among one of the best-performing wines in the Bordeaux 500 Index in 2015, and has seen a continually positive performance across all its vintages. In fact, the value of its last 10 vintages has increased by 42.1 per cent over the last 12 months. Here’s a tip: the 2015 vintage has the best value for quality but has yet to see a rise in demand. It would be prudent for investors to act on this ahead of the bottling in spring 2018.
Since 2013, Château Figeac has been under a new regime with well-respected wine consultant Michel Rolland also on board. Therefore, expect big things from this re-emerging Right Bank estate. At the moment, the wines are in the Premier Grand Cru Classé B, classification of Saint-Émilion, but Rolland has declared his goal of pushing it to Classé A. The next Right Bank classification is in 2022 and judging by how the latest vintages have performed — 2014 with points of between 93 and 95; 2015 with points from 97 to 99 — there is hope that he will attain his aim.
Our expert says
We often encounter investors who have overpaid for their wines, which obviously doesn’t get the investment off to the best-possible start. This is easily avoidable by doing due diligence and checking prices with reputable sources.
This article originally appeared on WealthinAsia.com, Asia’s marketplace for investors. For more information click here.