Fine wines expect bumper year

Fine wine investors can expect double-digit returns this year as strong demand from Asia and minimal volatility are lifting prices from their lows of 2008, according to the Wine Investment fund.

Andrew della Casa, director of the Wine Investment fund, said: "By the end of 2009, we expect fine wine prices to be as much as 20 per cent above their levels when we called the bottom of the market at end of 2008."

The fine wine market experienced price rises in September, with the Liv-ex 100 index rising by 2 per cent and the Liv-ex Claret Chip index by 2.8 per cent over the month. Year-to-date rises have been 12.2 per cent and 16.3 per cent, respectively.

Mr della Casa said eight out of nine months were positive, with one single fall of 1.1 per cent recorded in March, and that demand from Asia remained the strongest, lifting auction prices.

He said entire catalogues had been sold above the high end of estimates, with more than $20m (£12.6m) worth of fine wine being sold in September alone.

A six-litre bottle of Château Pétrus 1982 recently sold for £60,000 at auction in Hong Kong.

Mr della Casa said: "This trend is likely to continue as buyers look to secure stocks of maturing wine, which are only becoming scarcer as they are drunk."

The Wine Investment fund tranche of 2004 paid out in August this year. The payout was equivalent to a return of more than 13 per cent per year, compounded over its five-year term.

The fund is currently collecting subscriptions for its latest tranche.

The minimum investment is £10,000. Subscription fees are 5 per cent, and a 20 per cent performance fee is charged at maturity.