In times of trouble, investors usually turn to something that seems like
a safe haven. Life in a global pandemic is difficult enough after all,
without gambling away your money on an investment that goes sour because
of Covid-19 restrictions or the general economic turmoil they have
caused.
Historically, gold has been the safe bet, a physical asset that holds onto its value no matter what is going on around it.
But there is another investment option that has been on the up and up
amidst the chaos of this year. Whisky has proven to be a reliable
investment during the turbulence of Covid-19, which is no surprise given
how well it has performed over the last 10 years.
Presenting a return of 40% over a 12-month period, whisky investments
have soared whilst gold investments offer a mere 12%. So is it time to
switch from gold to whisky?
The Rise of Whisky as an Investment
To measure how well whisky performs as an investment it’s helpful to
have something to compare it to, and the Knight Frank Luxury Investment
Index demonstrates exactly that. The value of investments into classic
cars, for example, rose in value by 194% over the last ten years. Fine
art rose by 141% and gold by 175%.
However, whisky investments rose by 564%. When it comes to gold, whisky
still comes out on top, according to the Rare Whisky 101 report, which
showed that over the past five years the value has risen 182%, compared
to a rise of just 28.2% for gold, while both oil (15.9%) and the FTSE
100 (14.9%) also both trail whisky.
The BC20 Whisky Cask Index has shown that if you had invested $100,000
in whisky casks in July 2018, they would have been worth nearly $160,000
by the end of June 2020.
Meanwhile, the 1,000 most sought-after Scotch whisky bottles in the Rare
Whisky Apex 1000 Index have increased in value by almost seven times
since 2010. That’s quite the return on investment and is exactly what
whisky has to offer.
With global Scotch whisky exports growing in value by 4.4% in 2019 to be
worth £4.91 billion, there’s plenty of reasons for optimism around
whisky investments right now.
Whisky as a Safe Haven in 2020
So how has Covid-19 impacted whisky prices? Unlike gold prices which
plummeted in early March 2020, the early signs were certainly very
positive. While the world went into lockdown and meltdown in March and
April, investors were still buying up whisky.
So what is behind this rise in people buying whisky as an investment?
The 2020 Cask Whisky Buyer Report shows that 40% of investors are
looking for alternative investments in 2020 because they want to spread
and minimise the risk, which is hardly surprising as 30% say that they
fear that they’ll make a loss because of the impact of Covid.
But why is whisky proving to be a safe bet during a global pandemic?
Why Whisky is a Safe Investment
Whisky’s appeal in times like these is that it’s a physical product that
will retain its value without being overly impacted by changes in the
financial markets. When it comes to the classic whiskies from the most
sought-after distilleries, there’s only a finite amount available
because it was made decades ago.
Indeed, each cask has its own specific flavours, which only adds to the
appeal and value and investing in whisky means needing to have done your
research into these brands, their production methods, etc.
However, this is much easier and more straightforward than the kind of
insider knowledge you can need for other types of investments, making
whisky a more accessible investment. And if something does go wrong and
the monetary value does drop significantly, at least you still have the
whisky.
So if you’re looking for a safe investment that will grow despite the
continuing impacts of Covid-19 over the next months and years, the smart
move is whisky, which has been setting new records and shows no signs
of slowing down anytime soon.
Scotch Single Malt Cask Investment returns 10% + p.a.
You may have seen investing in whisky in the news recently. I wanted to let you know what we are offering here at Whisky investment Partners
to see if this could benefit you or your clients as we are looking to
build partnerships with professionals such as yourself.
There is clearly a demand for whisky at
present which is being driven by the economic uncertainty the virus
outbreak has caused and the impact it's having on traditional asset
classes from clients seeking non-correlated asset-backed safer
alternatives.
An Overview
An opportunity exists for investors to
purchase new-make spirit, fresh off the stills in 200L casks to hold for
the medium to long term to sell in the future for a profit. I’m sure
you’re aware that whisky increases in value with age.
Why Invest?
The simple answer is that every client
should hold a diverse range of products including non-correlated
alternatives. These will help protect portfolios during turbulent times.
This is especially relevant during the current crisis we find ourselves
in at present.
Track Record
There is a limited number of distilleries
in Scotland. As such, supply simply can't keep up with demand. Scotch
whisky exports grow consistently, year on year at an average of 5.8%
with new emerging markets opening up all the time. The export value
alone in 2019 was worth £4.8 billions pounds (GBP)
Scotch whisky has a proven track record of
appreciating in value every year as it ages. This rise in value can
increase exponentially after year 7 as only 15% of the 20 million casks
currently laid down maturing in Scotland are over this age marker.
Security
Cask owners benefit from full, outright
ownership, unlike bonds, funds, or securities. Once purchased the
ownership title is passed to the client. While maturing, casks are
stored in secure, HMRC approved bonded warehouses, fully insured against
fire, theft, and damage. Insurance is adjusted annually to ensure the
appropriate level of cover is always in place.
Investment Highlights
- Investment Term - 3 - 30+ years
- Projected Returns - 10%+
- Minimum Investment from - £2,100 (GBP per cask)
- Non-correlated sector
- 100% full ownership
- Fully insured against loss, theft, or damage
- CGT exempt
- Stored in HHRC approved bonded warehouses
- Multiple exit options
- Open to all investors in every country. No, restrictions
When it comes to the time to sell casks,
this could be in 3, 5, 7, or even 30 years’ time, we will sit down with
clients and discuss the various options available. We can, through our
network of blenders and bottlers broker a sale for a small 2% fee, or we
can purchase the cask back from clients directly. Alternatively,
clients can make their own arrangements either by contacting a blender
themselves, selling at auction, or bottling the product, whichever
option they decide best meets their needs, we will advise through the
whole process.
Generous marketing fees available for select Agents/Brokers/IFA’s who can promote the option to their client base.
