Global Investing

Cheers to double digit real returns

September 21, 2009

It’s good to drink it, but it seems good to sit on it too.

Fine wine, yielding double-digit returns, is low risk and good diversifier given its weak correlation to the return of asset classes — according to a fund which invests in fine wine.

The Wine Investment Fund says investors are receiving returns (after all fees and expenses) equivalent to 13.01% per annum over the last 5 years.

“This year’s payout represents a real return in excess of 70% or 10% per annum when allowing for inflation.  By comparison, over the same period the FTSE’s real return is -3.5% and a typical savings account would have generated a real return of less than 10%.  Fine wine has produced positive and consistent returns for decades now.  It really is proving its worth and we see more professional investors using it as a valuable diversification tool within a properly managed investment portfolio,” says Andrew della Casa, director of the fund.

The fund invests predominantly in wines from Bordeaux, which is housed in a “UK government bonded” warehouse and is insured at replacement value.

Minimum investment in the fund, which says fine wine maybe the only asset class with a perfect inverse supply curve, is 10,000 pounds and avoids buying fashionable or trophy wines.

(Photo: Natsuko Waki)

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