Every year, the amount of fine wine from previous years gets smaller. Increasing scarcity usually means increasing value

Fine wine has proved itself to be a robust investment over time, providing a solid return over the medium to long term compared with the FTSE 100, and with a lower risk profile. In fact, the value of fine wine indices generally show very little correlation with the stock markets. In addition, the value of fine wine tends to respond well to economic dips and uncertainty.

The robustness of the value of fine wine shouldn’t come as a surprise. Each vintage gets scarcer each time a bottle is opened (reducing supply) and the market is growing rapidly year on year (increasing demand). On top of that, as a fine wine matures and improves, its value naturally increases as well.

If you find the idea of investing in fine wine appealing, we’ve partnered with The Wine Investment Fund, a dedicated wine fund (you probably guessed from the name), so you can do just that.

The Benefits of Investing in the YCO Fine Wine Opportunity

Getting the right wines

This opportunity invests with a wine fund that has scored above average value growth in the wines it has selected to invest in. You might know a good claret when you taste one, but do you know which ones will probably perform best as an investment? We’ve teamed up with The Wine Investment Fund, who have a structured approach to identifying investment-grade wines.

Balancing your risk

This opportunity will invest your money in a range of carefully selected wines, reducing your exposure to value fluctuations. Over time, the fund will also rebalance the portfolio to ensure stability by adding and deleting wines.

Lower costs

Investing in wine through a fund typically costs much less than if you were to invest directly through a merchant. A merchant has costs they pass on to you. A fund’s fees are aligned with you. While there are admin costs, most of the money you pay to a fund for running your investment are calculated based on the profit you make.

Hassle-free logistics

Where do you keep the wine? How do you check that the wine is what you ordered? And that it isn’t faulty? We use a fund that takes care of all that and keeps wine in the securest wine storage facility in the world. Guess what? That also keeps the insurance costs down. As a private collector/investor, you’d be looking at much higher insurance costs.

Watch to Learn More about Investing in Fine Wine

Rodney Birrell of The Wine Investment Fund explains why fine wine is a strong investment opportunity

Our take

While the value of fine wines does fluctuate, fine wine as an asset class has proved to be robust and reliable investment over the longer term, even outperforming blue riband stock indices. We think the fact that The Wine Investment Fund specialises in fine wines from Bordeaux is an added bonus in this regard. The Bordeaux region is one of the most prestigious wine producing regions in the world.

The Risks:
While fine wines have proved to produce solid, reliable returns over the longer term, year-on-year values can fluctuate, sometimes quite dramatically—both upwards and downwards. As usual, you need to understand that the value of your investment can go down as well as up.

In short:
Fine wine offers investors the potential for good returns over time, with the added appeal of showing a low correlation with stock markets. This could be a suitable investment for someone with a longer-term approach for their investment portfolio.

YFSOL Classic Opportunity: Fine Wine

Your money will be invested in The Wine Investment Fund.

The minimum investment is GBP 10,000 for existing Polaris clients and GBP 25,000 for new ones. There is no upper limit.

To participate, you will need to set up a YFSOL Polaris account if you don’t already have one. Don’t worry. It’s simple and you only need to do it once. We’ll help you.

YCO Fine Wine in a nutshell

Structure:

The Wine Investment Fund is set up as a mutual fund company in Bermuda

Investment Horizon:

5 years

Valuations:

Portfolios are valued independently by Liv-ex, the fine wine exchange

Redemptions:

At will and settled within 90 days

Base Currency:

Sterling

Minimum Investment:
£10,000
 for existing Polaris clients; £25,000 for new Polaris investors

Manager:

Anpero Capital Limited (owners of The Wine Investment Fund)