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Fine wine still offers City best investment

Published:  05 October, 2010

Fine wine continues to outperform both the equities and gold markets throughout the year despite a slow down in growth of 0.8% in September.

The findings, from Bordeaux Index, point to what it calls will be "solid, respectable" price rises for the rest of the year.

Although gold at 5% and equity markets at 7% outperformed fine wine's 0.8% growth in September, they still lag overall for the year.

"A settling of prices is pretty rational and to be expected - no market goes up 5% a month forever," said Bordeaux Index founder and managing director Gary Boom.

"It's been such a dynamic market over the last 12 months, with prices rising on average 30% (index 31% year on year). While we're not expecting that pattern to continue the fundamentals are still there for solid, respectable returns."

He added: "Structurally the supply side is still very restricted and for the top wines, it's still a seller's market. And despite September's small headline rate, wine is still outperforming gold - and particularly shares - so far this year."

Despite the relatively small headline figure, the industry is still being kept busy with trade in the 2008 and 2009 Bordeaux vintages.

While prices for the top 2009 vintages continue to settle, the fine wine trade remains brisk for the best parcels of the 2008s.

"With another small and very high quality vintage seemingly on the cards for 2010, some of them may prove to be excellent value," said Boom.

Key performance figures:
* Bordeaux Index
September: +0.8%
Year To Date: +23.7%

* FTSE 100
September: +7%
Year To Date: +2.7%

* Gold:
September: +5%
Year To Date: + 20.7%