showing £16,247.10 after 4 years
The Liv-ex Fine Wine Investables Index is designed to track the wines commonly found in a wine investment portfolio. The index consists of Bordeaux red wines from 24 leading chateaux. The component wines date back to the 1982 vintage and are chosen on the basis of their score from Robert Parker. The wines are priced using the Liv-ex Mid Price with various scarcity weightings applied to account for older vintages and wines produced in smaller quantities.
The index dates back to January 1988 and was rebased at 100 in January 2004. Liv-ex has been calculating Mid Prices for selected wines from 2001 onwards. Component prices prior to that date are the result of an extensive collection of historical price data from leading fine wine merchants.'
The wine-searcher figures show that the 2005 Lafite bought at auction in January 2007 for £3700 (£4329 with buyers premium of 17%) could have been sold at auction in July 2014 at £8784 (£7905 with seller's commission deducted – calculated at 11%). This gives a gross profit of £3576. Take away the cost of seven years storage (£15 a case as charged by Cult Wines Ltd = £105) – profit is reduced to £3471 (£496 a year). This is still a very decent profit over the seven years but nowhere close to £2000 a year.
Had the investors entrusted their case of 2005 Lafite with a company charging an annual management fee at 1.75% (like Premier Cru Fine Wine Investments or Cult Wines Ltd) the net profit would be reduced by a further £1327.69 to £2143 (£306 a year). Still far better than a Cash ISA but the investor will be offering prayers that the wine bear market ends soon, otherwise their profit will be further eroded.