The Wealth and Fine wine fund provides a fantastic opportunity to access a dynamic combination of wealth creation and the intricate and specialised world of fine wines all rolled into one, there really is no other fund alike. In fact, the Wealth and Fine Wine fund continues to outperform traditional markets owing to its superb diversification. With the Wealth and Fine Wine fund investors are assured of smooth and reliable returns.
The wealth creation portion of the fund uses a 'quant' methodology to select from the entire universe of stocks - more than 38,000 on 52 markets - and rebalances every 30 days. The track record is very consistent and well above average. When considering the fine wine portion of the fund, which will comprise a basket of quality, top performing international wine funds and including some that are closed to new investment but which have been made uniquely available to Port Funds SPC, the overall returns remain quite remarkable (above 20% per annum annualised) but almost removing the volatility normally associated with traditional equity based funds.
In summary, the Wealth and Fine Wine Fund provides:
1. Exposure to a spread of investments with possibility of high return, limited exposure to downside volatility and low correlation to other asset classes.
2. Management of an alternative investment strategy Fund of Funds through a recognised and regulated international research manager.
3. A quality addition to your existing portfolio of a truly unique asset.
4. The ability to access funds with institutional discounts.
100% invested.
5. Provides a solid platform upon which you can build a dynamically performing portfolio.
6. A consistent performance.
7. Wealth element has posted a +17.85% per annum rolling return since launch with NO negative 12 month period.
8. Fine Wine element has produced +22.1% 12 month return on average
9. Minimum Investment US$/Euro 20,000
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Bringing Fine Wine Investment into the Public Domain
There is a romantic notion about wine investment, which is that you can buy two cases of young wine so that, after a period of maturation, you can drink one and sell the other to finance the purchase of another two cases. This self-perpetuating policy may allow some wine enthusiasts to drink ‘for free’. The fallback position of those who hold this view is that if values don’t rise as expected, they can always drink the whole stock. Sadly, though, it’s not much of an investment policy.
Interest in fine wine has been growing in the traditional markets of Europe and North America (which underpin the market for fine wines) and the emerging markets of Russia, India and China. The price of ‘blue-chip’ wines will increase with demand, yet volume remains finite: from their harvest date, the quantity of these wines can only decrease – sometimes at remarkable rates – especially when a wine is ready to drink.
While owning the physical stock of such blue-chip wines can give great returns, for investment purposes that’s not enough in itself. The key questions remain ‘what to buy?’, ‘where to store the wine?’ and, most importantly, ‘how much to pay?’ It seems that most wine investors to date have settled for so-called ‘investment advice’ from wine merchants who offer to put investors’ money into wines that the merchant already owns. This means that the investor pays the merchant’s margin in the price. Such advice may be given honestly, but it doesn’t ensure the best price is achieved – which is the key to investing in wine. Price determines the time it takes to make a decent return.
A lot of great wines sit on lengthy price plateau during periods of maturation. Often, this has to do with whether or not the wines are being written about. For example, whilst the 2003 Bordeaux was being shipped to clients it was reassessed by the critics. The effect was an increase in sales of the 2003 vintage and subsequently an increase in price of those wines that critics felt were of greater quality than they had previously considered during their En-primeur (i.e. pre-bottling) stage. Therefore, from an investment point of view, why tie up your capital during a price plateau?
However, what if you manage to acquire wines at such a high price and the next harvest produces an equal, or better, quality vintage? I believe securing a stock of great wines early will ultimately produce terrific returns. It is purely that the time scale is debatable. Investors have rarely been offered wine portfolios managed by truly independent fund managers and there have been very few pure wine investment funds, but some are now opening. And as wine becomes a viable asset class, more funds are likely to become available with variable risk levels.
Liv-ex (the international wine exchange) has included its index of 100 investment grade wines on Bloomberg Indices (which quotes indices of the world’s main investment markets). Therefore, whatever our individual feelings about wine are, financial markets are now being provided with performance data bringing fine wine into the public domain as a viable, and sustainable, vehicle for capital growth.
This article was originally written by Peter Lunzer who is director and wine adviser for The Wine Investment Fund The content has been edited for inclusion purposes.
