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News
Fine returns from fine wine fund
Investors in one of the fine wine trade’s leading funds have enjoyed healthy returns despite current market conditions. Stock bought by The Wine Investment Fund in 2004 has matured, giving investors returns equivalent to just over 13% per annum, or 10% when allowing for inflation.
“Over the same period the FTSE’s real return is -3.5% and a typical savings account would have generated a real return of less than 10%,” said Andrew della Casa, director of The Wine Investment Fund, highlighting fine wine’s weak correlation with other asset classes.
This year’s payout in August is similar to the fund’s last five-year tranche, which returned an equivalent of 15.94% pa and was sold in August 2008, just before the market suffered a sudden price correction post the Lehman Brothers collapse.
Despite knowledge of the altered economic conditions in 2009, this year’s positive payout was predicted to produce similar returns to last year. Speaking to the drinks business back in February, Peter Lunzer, co-founder of The Wine Investment Fund said, “The wine bought in 2004 will produce the same returns to the investor”.
The Wine Investment Fund is confident of future healthy returns too. “With no sign of a slowing in the increase in prices which we have seen in 2009, a return to the long-run average rate of increase of 15% per annum is clearly on the cards. This is a very good time to be investing in fine wine,” commented Casa.
Those who invested £20,000 in 2004 would have enjoyed a payout of £37,000.
For more information on The Wine Investment Fund’s techniques for investing, read the fine wine profile in the March issue of the drinks business.
Patrick Schmitt, 24.09.09