Fine Wines - A Superb Investment

Safe and Secure for your Future.

Or is it?

Fine wines are still increasing in value. Facts are facts. 

But what is a fine wine as an investment?

Why are the markets putting huge amounts into wine and gold?

More so now as this Channel 4 Presentation explains (below).

The rest of this page will offer you your own opportunity - not to buy necessarily (we obviously can direct you to respected traders if you wish) - this page is prepared to offer advice, which can be used as a bench mark for your own due dilligence. Good luck - and enjoy (circ:simon young - partner)

Simply press play...

Did you know? Since the 1950's Fine Wine has shown an average of 1% compound interest per month

Over the past 25 years, Fine Wine Investments have out-performed other traditional investment vehicles, including the FTSE 100

The Fine Wine market has proven to show near-zero correlation to other economic trends as well as low volatility

The attraction of TAX efficient properties, including Capital Gains Tax, Fine Wine Investments is now recognised as an asset class of it’s own class

From 1950-1985 the Vintage Claret Index average annual compound return of 15.2% *

From 1983-2002 the Fine Wine Index average annual compound growth of 12.3% **

From 2003-2007 the Liv-ex 100 Index annual average compound growth rate was 15.3% ***

Source: * "The Successful Investor". 1988 (Robin Duthy) ** "Wine Investment for Portfolio Diversification". 2005 (Manesh Kumar) *** Liv-ex.com

Capital Gains Tax Free Investment Opportunity

Fine wine is and has been seen as a valuable commodity. It benefits from not suffering the effects of economic downturns such as the one we are experiencing right now. The Fine Wine market has proven to show near-zero correlation to other economic trends as well as low volatility.

That’s why we see it as a viable investment in these uncertain times.

In today's economic climate, safety and security is king. We have seen the collapse of the world's biggest financial institutions along with stock markets across the globe crashing, all having affected our savings, wealth and pension plans. There is no denying the concern and apprehension among investors today as we near the bottom of this current recession. However, the Fine Wine market is yet again proving to be the safest ship through these volatile times.

Indications so far in 2009 clearly point towards the best buying opportunities since 1997. Asia's increasing love-affair with Bordeaux has already climbed 36% over the past year due to import duty being abolished.

Today, over 40% of all Fine Wine being sold in London is being shipped to Hong Kong (the gateway to Asia/Far East) with the majority of the wines being consumed instead of “laying down for investment”

Record sales at Auctions during the first half of 2009 have proved optimism with investors on an international scale pointing towards a pattern that buying now only requires a 'why not?' attitude.

As the economic recovery in Asia appears to have begun, already we are seeing a resurgence in their buying power and love affair with anything 'Bordeaux'.

 
It has finally been accepted that Asia will continue to dominate this market, with clear indications that they have only just started.

Despite the global downturn over the past 12 months - sales of Bordeaux wine are up a staggering 36% in China alone, over the same period!

The historic performance of this market speaks volumes. It has shown over 1% compound interest per month since the 1950's. The market has delivered a 12.6% annual compound growth rate since January 1988 with the benefits of being exempt from any Capital Gains Tax.

Robert M Parker, jnr.

As indicated above, all profits made from investing in Fine Wine are Capital Gains Tax free as the Inland Revenue class Fine Wine as a “wasting asset” with a lifespan of less than 50 years.


There are two ways of investing in Fine Wine:


1. En-Primeur (also known as wine futures)

This is when the wine is still in the barrel, normally the grapes are picked September/October and are stored in barrels at the chateaux until the wine is bottled in Spring around 19 months later.


Past Performances

The below table represents the 2005 En-Primeur vintage release prices in April 2006 until June 2008 when the wines were bottled and became physical.

This table below represents this years 2008 En-Primeur campaign.

As you can see the returns that can be made buying En-Primeur can be staggering, the 2009 campaign will commence in April/May of next year and indications are the wine is as good as the legendary 2005 vintage which is regarded as one of the greatest vintages in the last 50 years!!

2. Physical Wines


Buying physical wines that are all ready bottled are stored at Vinotheque Wine Cellars in Burton Upon Trent in Staffordshire which is part of London City Bond.

Wine is held “Offshore” in this government bonded warehouse where our clients open up their own account and pay storage fees so that the wines are stored in perfect conditions, the fees also include full insurance at the current market price.


Past Performances

The below table represents different physical wines from various vintages.

Projected Returns


Based on historical evidence and with the added interest from the Far East, buying Physical wines should show a minimum of 10-15% per annum.

Buying En-Primeur at release prices should show clients a minimum of 30-40% until the wine is bottled around 19 months later.

Recent media attention to the Fine Wine Market only echoes what is already known amongst veterans of the business.

FACT: From 1950-1985 the Vintage Claret Index average annual compound return of 15.2% *

FACT: From 1983-2002 the Fine Wine Index average annual compound growth of 12.3% **
Source: * "The Successful Investor". 1988 (Robin Duthy)
** "Wine Investment for Portfolio Diversification". 2005 (Manesh Kumar)
*** Liv-ex.com

FACT: From 2003-07 the Liv-ex 100 Index annual average compound growth rate was 15.3% ***

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