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Wine is much more than a pleasant tipple. It can also be an exciting and potentially profitable investment to add to your portfolio. If you’d like to find out more about wine investment UK opportunities and pick up a few tips on how to get started, this Moneyfarm blog will be of interest.
| 🍷 Is wine a good investment in the UK? | Yes, wines serve as good alternative investments |
| 🤑 Is Bordeaux a good investment? | Yes, Bordeaux wine has a history of being a favourite amongst wine collectors |
| 🫰 How much do I need to start investing in wine? | You will need at least £8,000 to £10,000 to start a good wine portfolio |
| 🍾 What is the best investment wine? | The best investment wine by value is the ‘Lafite Rothschild Bordeaux’ |
Is wine a worthwhile investment in the UK?
Investing doesn’t only have to be centred on company stocks and shares. In themselves, they are not particularly interesting. But investing in collectables can provide that missing interest, and wine investment UK opportunities are a good example.
There’s an interesting story in The Times Money Mentor about a guy who began buying wine 30 years ago. He maintains he has made £500,000 from his wine investments. Okay, he has invested £4 million over the years, but the return he received is rewarding, something that is backed up by a recent wealth report stating that the value of investment-grade wine increased by 13% last year (2021), and 127% over the past 10 years.
One of the key pieces of advice you will read about investing is to diversify. You have the option of building a strategy that allows room for alternative investment ideas, so why not check out a few wine investment companies UK investors have access to?
You’ll find a few suggestions on the investing in wine webpage on the investment guide site. Some of the best wine investment companies UK wine investors can work with are listed there.
Tips for fine wine investment UK beginners
When considering going down the fine wine investment route, you must consider several things, including storage.
You probably don’t have the right storage conditions at home, and if you don’t store your investment wines properly, they could devalue rapidly. So it’s best to store your purchases in a bonded warehouse, like London City Bond. You can then prove that your wines are well stored, which will be of prime importance to potential buyers. But of course, you will incur storage costs which must be taken into consideration.
There is another advantage to using a bonded warehouse. If the warehouse is HMRC approved, purchases are duty and VAT free, and when it comes to selling, any profit you make is also free from Capital Gains Tax.
If you’d rather take the risk and store your investment wines at home, the Wine Spectator published a helpful guide for what you will need.
Only buy from trusted wine investment companies in the UK
Like any investment opportunity you may come across on the internet, there are several wine investment scams UK investors should beware of. Before you start searching, we recommend you read the Avoiding Wine Investment Scams article for more information.
The best investment wines
Knowing which wines to invest in is no easy thing. But websites like Cult Wines can steer you in the right direction. According to them, Bordeaux and Burgundy, and champagne wines made some impressive gains last year. So the advice they offer is to invest in brands such as Domaine Leroy and Domaine de la Romanée Conti, which they recommend for safe long-term investing.
Is buying En Primeur a good investment?
Buying en primeur wine is, in effect, like buying into futures. You are purchasing a wine that has not yet been bottled and is unlikely to be for 12 to 18 months. It’s a wine investment that UK newbie investors should steer clear of. It is risky, and returns are likely to be low.
How much should you invest?
Suppose you are wondering how to invest £10,000. In that case, the wine investment funds that UK investors can access are one of many alternative investments you can take to help diversify your portfolio in your general investment account.
You can invest anywhere from a £200 lump sum to several thousands of pounds if you are lucky enough to be considering how to invest £100,000. However, it’s important to consider storage costs if you intend to use a bonded warehouse. The smaller the sum you invest, the higher the storage costs will be as a percentage of your initial costs; therefore, the bigger the return you need to make to cover that cost.
Why invest in wine?
As stated earlier, as an alternative investment, the fine wine market has performed well, both last year and over the last decade. So it may surprise you to learn that if you simply invest in UK wine funds based around Bordeaux wine, and if the trend over recent decades continues, your investment will outperform other fancied commodities such as gold or oil.
However, never forget that any investment in the wine industry or any other industry can fall as well as rise. That’s why it’s important that when considering your short vs long financial needs as a wine investor in the UK, this type of investment should be part of a long-term investment strategy.
If you’re buying bottles, you will eventually look to sell them through the secondary market. But there are other ways you can invest in wine. For example, you can invest in wine merchant shares as part of a stocks and shares ISA or choose an alcohol EFT.
Down the Moneyfarm App today
You can find out more about investment options on the investor profile page on the Moneyfarm website. We are authorised and regulated by the Financial Conduct Authority as a bonafide investment advisor and investment management company.
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FAQ
Is wine a good investment idea?
Wine is a good alternative investment that can help diversify your investment portfolio. Historically, wine investments have had an annual return of 10.6% over the last 15 years. Over time, it has performed better than many traditional investments, and as of 2021, fine wine investments produced better returns than gold or the Dow Jones.
How do I invest in wine?
You can invest in fine wine brands such as Lafite Rothschild and Mouton Rothschild. Firstly do your research on vintages and winemakers, then determine how much you want to invest and where you want to buy your wines from. Finally, determine where you want to store your wine purchases.
Other alternatives include investment in wine funds like Anpero Capital, Vineyard & Terroir Fund and the Wine Investment Fund. You also can invest in Cult Wine Investment and VinoVest groups or wine stocks like Constellation Brands, Diageo and Truett-Hurst.
Which wine will increase in value?
Wines with good pedigree tend to increase in value. Wines made in specific regions, including Bordeaux, Burgundy, Rhône Valley, Tuscania, and others, tend to be more valuable over time than wines made elsewhere.