This question would have probably came into many wine enthusiasts’ mind before, what are wealthy families collecting and is fine wine one of them? In recent years, wealthy investors have increasingly included alternative forms of investment, such as fine wine, art or vintage cars, to their portfolio.
What is fine wine investment?
The quality and scarcity of fine wine appreciates over time – and so does its value, this is the underlying principle of investing in wine. Today, wine investing is no longer an elite pastime – there are wine stock exchanges, wine specific investment funds, professional storage solutions to store your bottles as they age, and e-Commerce platform to buy and sell your assets.
Why fine wine investment?
The fine wine market has outperformed most global equities and exchange-traded funds (ETFs), and is less volatile than real estate or gold, it can be a profitable alternative investment option for investors and wine drinkers to diversify their portfolio. You can keep abreast of your wines’ valuation by following the London International Vintners Exchange (Liv-Ex), however be aware that wine is not as liquid as the stock market, but is definitely more liquid than real estate and alternative assets like fine art.
Types of wine to invest in
Majority of wine produced in the world is meant for consumption, rather than for investments, so even among those meant to be aged and kept for years, not all can be considered for investment. Across all the wine producers around the world, only about 250 produce investment grade fine wines, and about 90% of these investment grade wines are produced in Bordeaux, France. The Grand Cru wines of Bordeaux and Burgundy have long dominated the scene and wine investors typically need to hold cases of wines for at least 5 or more years to allow it time to become rarer, before selling it at a profit in the secondary market
How to start your wine investment?
- Purchase and resell individual bottles or cases of particular wines.
- Purchase shares in a fund that specialises in wine investments – like a mutual fund
- Invest with a wine company that offers wine portfolio management service
However prior to choosing the your wine investment channels, you need to do the following works:
- Step 1 – Research about wines
- Step 2 – Determine how much you can invest
- Step 3 – Decide where you want to buy your wines from
- Step 4 – Determine how you want to store your wines
- Step 5 – Decide where and how you want to sell your wines
OWC offers a wide range of solutions from wine sourcing, logistic arrangement, wine storage to “En Primeur” services for our wine collectors and investors . OWC also enable wine entrepreneurs to leverage on OWC eShop platform to sell their wines and auctioning of their prized possessions. Talk to us for a more in-depth discussion.