What percentage of a portfolio should be…
What percentage of a portfolio should be represented by different regions?
Historically this was a very simple question to answer.
Ten years ago, the number of serious investment grade wines could be counted on your fingers and toes (assuming, I must add, you have the standard number of digits for homo sapiens). And all, apart from the King of Burgundy that is Romanee-Conti, came from Bordeaux. The names will be familiar – Lafite Rothschild, Petrus, Latour, Haut-Brion, Margaux, Yquem et al. It was Bordeaux all the way.
But since mid-2011 there has been a re-evaluation of what constitutes a balanced wine holding. There is still a place for the classic claret, of course, but our research has shown that pockets of value are springing up all over Europe, and even in the New World.
Statistics, readily available on Liv-Ex and other wine pricing and research websites, have shown that classic left bank Bordeaux wines have dropped in value from historic, unprecedented highs in 2011, whilst wines from Burgundy, Tuscany, Champagne and the New World have delivered growth. So whilst the fact is that Bordeaux remains the keystone of any investment portfolio containing at least 75% of the overall holding, having some of the portfolio (perhaps up to 15%) given over to Burgundy, and the remainder in Italian, Champagne and New World wines is a very sensible plan.
James Sowden
APM
23.07.13