Why buy stocks when you can put your money in wine?
UK-based investment manager says fine wines can fetch handsome returns
MUMBAI, JULY 30:
You won’t be able to drink it, but if you choose well, it will be a gem in your investment portfolio. After real estate, gold and stocks, fine wine is now being touted as an investment option for high net-worth individuals.
UK-based Amphora Portfolio Management, which specialises in fine wine investments, has formed a partnership with sommelier All Things Nice to launch a fine wine investment arm for India’s wealthiest.
“A lot of high net-worth individuals are talking of fine wine as an investment. This is an opportune moment as one doesn’t have to stock up on vintage wines physically,” Nikhil Agarwal, Sommelier and Director, All Things Nice, told BusinessLine.
Fine wines that are easily traded include the Bordeaux wines, as well as wines from Burgundy, the Rhone, Champagne, and Italy.
David Jackson, Director, Amphora Portfolio Management, said investment in wine was growing as wines futures attracted investors. He added that some investors in the UK have reaped a 62 per cent return but cautioned that market conditions determine the growth of an investment.
Investors can put in as little as £3,000 (₹3 lakh). “An investor can get a good diversified portfolio at £20,000(₹20 lakh),” says Jackson, adding, “since vintage wines are few, and depleting, we believe their investment value will grow.”
Philip Staveley, Director, Amphora Portfolio Management, explained how it works: “We stock the wines for you in a bonded warehouse in London. We give you in-depth market reports and ultimately help you sell your holdings at the best prices.”
The company has several such investments in the UK, the US and China.
All Things Nice and Deutsche Bank recently organised an event to showcase the potential of wine as an investment option. The All Things Nice member database has 9,500 high net-worth members.
Know your wine
Investors in wines have not had it easy in recent times. The Bloomberg LIVX100, a fine wine index that represents the price movement of 100 of the most sought-after fine wines, has been on a downward path.
The index is down 8 per cent so far this year and has lost 35 per cent of its value since June 2011.
So, make sure you pick the right vintage.