Wine fund scores 32% growth in four years

Added 28th October 2016

A Malta-listed fund, which invests mainly in fine French wines and top class Scottish whisky, said it has generated a cumulative net return of 32.2% since its inception four years ago.

Wine fund scores 32% growth in four years

The Wine Source Fund, an open ended fund which is part of WSF Sicav Plc, said the return was over the four years to 31 August and means the fund has generated an unlevered annualised net return of 7.2% a year since September 2012, when it started.

The fund’s performance compares well with the returns of the The Liv-ex Fine Wine 100 Index, the industry’s main benchmark, which has risen around 7% over the same four-year period.

Daily trading insights

Philippe Kalmbach, chief executive of wine services provider Wine Source Group and co- manager of the fund, said its performance reflected the insights gained from the company’s daily dealings with producers and international fine dining establishments.

“These first-hand market insights led us to fine tune our strategy by investing in select markets and benefiting from favorable price dynamics in an overall quite challenging environment.”

Wine Source fund’s current portfolio comprises more than 1,000 different wines and spirits from producers, mainly located in France, Italy, Spain and the USA. Bordeaux and Burgundy wines represent more than 50% of its investments. Spirits account for about 10% of the portfolio with big gains made from early investments in the Macallan Lalique bottlings of aged whisky.

Kalmbach said about 40% of the Wine Source Fund’s portfolio is made up of assets purchased directly from producers at preferential prices. The wines are stored in selected bonded warehouses and then sold to fine dining establishments around the world to generate stable returns.

The fund reports net asset value (NAV) each month using pricing by Wine Owners, the independent wine valuer that works closely with a panel of 200 professionals, and market operator Liv-ex.

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Richard Hubbard is the group editor at Last Word. He is responsible for the editorial content of International Adviser, Portfolio Adviser, Expert Investor and Fund Selector Asia. Richard previously worked for Thomson Reuters and has covered the financial services industry and investment themes from its offices in London, Singapore, Hong Kong and New York. Richard started his career at the Australian Financial Review in Sydney.

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