The case for investing in fine wine and classic cars

By International Adviser, 27 Oct 16

With investors facing increasingly poor returns from traditional investments, the case for putting your money in alternative investments such as wine, classic cars, stamps and whisky is getting stronger, says Adam Benskin, executive director at international IFA firm Strabens Hall.

Fine wines

1 234 5

The Liv-ex Fine Wine index, which measures fine wine merchants’ activity, is the industry benchmark. It shows that one of the top performers over one year was the Mouton Rothschild 2000 vintage; it has increased in value by 9.4% over the year to date.

In January 2015 a case of 12 bottles was worth £12,500 ($15,247, €13,982). That case is now valued at £13,676.

Wine as a serious investment is typically confined to wines from the Bordeaux region, such as Chateau Lafite and Chateau Latour.

The traditional way to invest is through established wine merchants, such as Justerini & Brooks. You will probably need at least £5,000 to £10,000 to get started. More recently, wine funds have been launched which offer an alternative way to access the market.

Wine investments are usually held for about eight to 10 years, as sales commissions are higher than those on stocks and shares.

Globally, about 60% of buyers are based in the UK and Europe, while 40% are spread across the rest of the world, including 25% in Hong Kong.

Demand from China is below earlier peaks but remains strong.