Get a taste of fine investment

Money doesn’t grow on trees – it grows on a vine. And with the value of fine wines maturing rapidly, now could be the perfect time to invest in a case of the good stuff

You don’t have to be a wine buff to appreciate the value of investing in wine.

Fine wine values have been surging. Château Lafite Rothschild 2008 increased from £1,605 a case in 2008 to more than £15,000 in 2010, while Mouton Rothschild rose over 400 per cent in the same period. Much of the rise is driven by the newfound passion for Bordeaux among the wealthy in China, but fundamentals such as limited production help.

However, wine is not guaranteed to appreciate, so it pays to research the market. “We pride ourselves on offering realistic returns so we only recommend investment in the blue chips of the wine world,” says Kyle McLeod of wine brokerage Worldwide Wine Investments.

The company concentrates on the ‘top eight’. These are first growth Bordeaux comprising Château Margaux, Château Latour, Château Lafite Rothschild, Château Haut-Brion and Château Mouton-Rothschild, plus Châteaux Petrus, Ausone and Cheval Blanc. These wines have historically shown the best investment performance, according to Worldwide Wine Investment.

The recommendations that Worldwide Wine Investment give are also influenced by Robert Parker Junior, the most influential name in international wine investment, who grades wines out of 100.

“We only recommend first growths scoring between 95 and 100,” says McLeod. Case prices include ten years’ storage in government-bonded warehouses, ensuring that it is VAT and duty-free. It attracts no capital gains tax if held for less than 50 years, making wine a tax-free asset. Insurance and administration charges are also included.

Investors can buy wines en primeur, that is, before bottling, tending to be less expensive, giving the possibility of greater gains later. McLeod says: “Fine wine is best seen as a medium-term investment for at least three to five years.”

When you want to sell, the brokerage can arrange it for you.

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