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11.12.20

How Whisky is Surpassing Wine as an Investment Option in 2020

2020 has been a tumultuous year for investing, but there are still some lucrative investment opportunities to be found, even in the middle of a global pandemic.

Both wine and whisky provide a potentially profitable investment opportunity with both asset classes being listed in the top three luxury investments in the Knight Frank Wealth Report, but which boasts the best value for money? Fine wine prices have slumped in recent months while whisky values have skyrocketed leaving us in no doubt that rare whisky is now comfortably outperforming fine wine as an investment.

Covid-19 has brought with it a change in investor attitudes and activity and as a result, whisky investment is becoming more and more appealing in a volatile market. Providing investors with an annual return of 5%, whisky investments are on the rise whilst wine investments offer only 1%. So should you be switching from wine to whisky?

Whisky as a Front Running Passion Asset

Both wine and whisky are named in the 2020 Knight Frank Luxury Investment Index which compares the top ten luxury asset classes and reveals the most lucrative items to invest in during the coming 12 months. Here we can see that value of wine, for example, rose in value by 120% over the last ten years but this pales in comparison to whisky investments which grew 564%.

And fine wine isn’t the only investment option that is playing second fiddle to rare whisky. Classic cars, art and even gold pale in comparison. One of the many reasons whisky is a more reliable investment option is that unlike wine, whisky isn’t perishable and ceases to age once bottled. Scotch whisky that was distilled a century ago will still be able to be enjoyed today.

Whisky Cask Investment Remains Robust

For investors new and experienced, Covid-19 has been a challenge, but whisky has provided a much needed refuge from a time of economic turmoil. Unlike investments that are swayed by financial uncertainty, alcohol related investments are often more stable as they rely only on supply and demand.

What’s more, the BC20 Whisky Cask Index provides further evidence that whisky investments show no signs of slowing down, showing that if you had invested $100,000 in whisky casks in July 2018, they would be worth around $160,000 by the end of June 2020. That’s a better return on investment than other luxury asset investments.

Liquid Assets: Whisky Sales Prove Cask is King

There is no doubt that 2020 has brought with it feelings of uncertainty but if the latest auction sales show anything, it’s that liquid assets are still very much in high demand. Which is great news if you are on the hunt for an investment of passion.

“It seems single malts have taken over from wine,” confirms Sami Robertson, a Knight Frank global property ambassador who works closely with clients based in Singapore.

And it seems that the record auction sales figures for both wine and whisky reflect this. A 12-bottle case of 1990 Domaine de la Romanée Conti fetched 260k at Sotheby’s Transcendent sale in March but this impressive figure pales in comparison to the single bottle of The Macallan Fine & Rare 60-Year-Old 1926 sold for £1.5 million in London at Sotheby’s setting a World record.

So if you want to diversify your investment portfolio in 2020, but you don’t want to invest in a luxury asset class that is correlated to the stock market, whisky cask investment could be the key to future wealth and success.