Investing in wine is a low-risk and active way of producing a diversified portfolio of real assets. Fine wine investment is generally a niche field limited to sophisticated investors and high net worth individuals; however, at Zarah we firmly believe everyone should have the opportunity to invest in the fine wine market; a market determined by strong economic and natural forces regulated solely by supply and demand. Our philosophy is to take a dynamic but risk-controlled investment approach based on matching our clients’ expectations with consistent market performance analyses.
Market performance
“With an estimated $3bn invested either directly through listed and unlisted funds, fine wine remains a niche play. But is attracting considerable attention from wealthy investors in Singapore, Hong Kong and Shanghai, as well as the UK.” – FT.com by Ellen Kelleher
The fine wine market has out-performed almost every maior financial index over the past two decades. There have been several years in which returns have topped 20%+ per annum. However, it is fine wine market’s long-term character, stable returns and low volatility that attracts investors. Liv-ex Fine Wine 50 performed better than gold, oil or stocks in the last five years.
Fine wines vs. shares
Wine is a tangible asset. Unlike a share or a bond it holds its value even during economic downturns. In addition, fine wine operates in a structural market shortage with legal limitations on productions. The fine wine market is in constant shortage against the growing global demand, leading values to a higher equilibrium price. Furthermore, fine wine investment is unregulated, thus tax efficient, which can bring significant advantages to your investment. We recommend consulting your tax advisor regarding the inclusion of this asset in your personal arrangements.
Building your portfolio
Zarah can help you build your fine wine portfolio. To get started, you just need to decide how much and for how long you want to invest. We can help advise you on an investment approach (Conservative, Balanced, Dynamic) to suit your objectives and provide market research and analysis to help you understand the “rules of the game”. You need to understand what you are dealing with if you want to be successful. A profitable investment also requires careful and informed stock choices. Just as you might analyse a company in detail before buying its shares, at Zarah we have the know-how and we use a variety of analytical tools which allow us to construct a multidimensional outlook of the market. Our objective is to work with our clients to select a risk-controlled portfolio that will maximise performances and suit the investor’s expectations.