The Wine Investment Fund says investors in its 2004 tranche are receiving returns equivalent to 13.01 per cent per annum over the last five years.
Investors in the 2003 tranche received payouts in August 2008 with a return equivalent to 15.84 per cent pa.
This double digit return, which is in line with TWIF’s stated objectives, has been generated after considering all fees and expenses and despite the correction experienced in the fine wine market in 2008.
Andrew della Casa, director of The Wine Investment Fund, says: “This year’s payout represents a real return in excess of 70 per cent or ten per cent per annum when allowing for inflation. By comparison, over the same period the FTSE’s real return is -3.5 per cent and a typical savings account would have generated a real return of less than ten per cent. 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. The performance of our other tranches are in line with expectations for each of their respective payouts.”
A large percentage of TWIF investors subscribe to a new tranche each year using their payouts and this year’s subscribers will benefit from the 12 to 15 per cent growth already generated in the fine wine market since the beginning of the year.
UK investors will not attract duty, VAT or capital gains tax.
TWIF invests predominantly in wines from Bordeaux. With Bordeaux Châteaux producing limited supplies of wine from fixed parcels of land and only some 40 Châteaux producing investment grade wine, demand increases due to both improving quality (as fine wine matures it improves) and rarity (the quantity of any given wine from any given vintage can only decrease over time as it is consumed). Fine wine is perhaps the only asset class with a perfect inverse supply curve.
TWIF achieves capital growth by holding physical stock of fine wine, predominantly Bordeaux, which is housed in a UK government bonded warehouse and is insured at replacement value. As a lower risk investment vehicle, TWIF does not acquire wine at the en-primeur (i.e. pre bottled) stage of a wine’s life, when its price is typically highly volatile. In addition, buying fashionable or trophy wines, or wines which are near the end of their drinkable life, is avoided.
Aimed at the sophisticated investor, the fund’s subscribers include institutions, family offices, private banks and fund of funds as well as private investors.
