Discover one of the safest and best performing asset classes available today
Are you willing to explore a new investment asset class?
Are you looking for an investment product that consistently outperforms equities, property, and gold?
Do you long for a market that is secured by irrefutable, rock solid fundamentals?
If your answer is ‘YES’ to these three important questions, read on to find out about a collectable that may be just what you are looking for.
“Single malt #ScotchWhisky has consistently outperformed traditional investments including, equities, gold, property, and wine”.
The world whisky shortage is nothing new, but because of it, single malt Scotch whisky is undoubtedly one of the best performing assets in the world today. In fact, for the last 10 years or so, single malt whiskies aged between 25 and 60 plus years have proved to be one of the best investments money can buy. A simple internet search will identify an abundance of publicly available sales and price data highlighting Single malt #Scotch Whisky as a safe, lucrative, and secure investment. What’s more, this data shows that the potential returns available from single malt Scotch whisky, make it a more effective medium-term investment than the big three; equities, gold, and property.
“Nothing can compare with the performance of whisky, it has proved its status as an alternative investment,” Daniel Lam, Head of Wine & Whisky, Bonhams, Hong Kong – 2018
There is a huge amount of content on the internet discussing the performance of whisky as an investment, detailing exactly what makes single malt whisky such an irresistible and irrepressible investment asset.
For several decades, fine wine investment has been one of the most popular alternatives; so much so that commentators have used the investment performance of fine wines as a benchmark for other alternative investments.
The Bloomberg study below highlights the performance of whisky against fine wine over the last 10 years. Created using data from the Liv-ex 100 Benchmark Fine Wine Index and Rare Whisky 101, Bloomberg’s chart clearly shows that whisky has proven to be a remarkably more effective, and profitable alternative investment than fine wine for the last decade.
‘’Since the end of 2008, an index of whisky prices compiled by Rare Whisky 101 has increased 580 per cent while the Liv-ex 100 Benchmark Fine Wine Index grew about 50 per cent.’’ SOUTH CHINA MORNING POST
Spirit Whisky can only be Called Scotch Whisky After a Minimum Maturation Period of 3 Years
The Scotch Whisky Regulations 2009 stipulate that the spirit whisky created by a distillery may only be called Scotch after a minimum of 3 years maturing in a cask. A 60 year old single malt needs to be ‘laid down’ in cask for over 2 generations to mature, so it is easy to understand why it is so difficult for distilleries to plan for future aged releases.
Single Malt Scotch Whisky now accounts for 20% of all UK whisky exports, and as appreciation for whisky increases in line with population growth, it is the lengthy process of maturation that has naturally created such an acute shortage of single malt whisky. Distilleries recognise this and are now releasing much younger ‘No Age Statement’ whiskies (NAS) to feed the ever growing demand and avoid the extremely long maturation time needed to create the classic single malt whiskies of old.
Soon you will not be able to order a single malt whisky by its age, if it is a No Age Statement whisky, you will instead order it by its contrived, but rather appealing name. A good example of this is Suntory discontinuing its Hibiki 12 Year-Old in 2015 (due to an acute shortage in supply of suitable 12 year old casks) before introducing an NAS whisky called ‘Harmony’… perhaps intended as a replacement?
Single malts aged for 25 years and above may well soon become a thing of the past. Hence, they are not only prized and collected by investors as valuable appreciating assets, they also offer the security of a fast disappearing product, steeped in a glorious history.
In May 2018 Suntory, the Japanese whisky power house, announced that due to insufficient availability of suitably aged stock, they would be ceasing production of their much loved, Hibiki 17 year old.
Prices for the Hibiki 17 doubled almost overnight and have risen by over 250% on average in the last month as collectors and investors scramble to buy up the last remaining bottles in the market.
How to Invest in Whisky?
Whether you are interested in casks or bottles, it always pays dividends to deal through advisors that exercise exemplary judgement, have excellent ties to the industry, and offer the advice of advisors in the top echelons of the whisky business. If you can, it is always best to find a whisky investment business whose advisors also advise for other institutions or private collectors.
The Basics: Look for Rarity, or a Whisky Release with a Limited Number of Bottles in Circulation
Remember, we are after aged single malt whiskies either in cask or bottle; bottles that are available as pre-releases, or bottles that have a presence in the first and secondary markets that are able to show a good history of investment growth. Your advice source should also be able to uncover some hidden gems; performers of tomorrow.
Narrow your choice down by choosing a minimum age; perhaps 25 years old or more, and then look at the available names and options.
Casks offer the investor superb potential for gain if the right cask is selected. Ask your advisor if they offer a full cask advisory service. A good advisor will assist in the nurturing of the cask, keeping an eye on the amount of natural evaporation (the angel’s share), the ABV (Alcohol by Volume – the Scotch Whisky Regulations specify a minimum ABV of 40% to qualify a whisky as Scotch), your advisor should also advise you on the best time to sell or bottle the contents of your cask.
Closed distilleries are also known as silent distilleries. There are a number of Scottish distilleries that have fallen silent over the years and some of their well-known output can often make for a good purchase.
It is probably fair to say that every whisky collector loves a whisky tasting event. Tastings and Masterclasses offer a wonderful opportunity to meet other like-minded collectors and investors to sample the hidden joys of whiskies that may have been on ones ‘wish list’ for years. Tastings and Masterclasses present a path to discovery for even the most experienced collector, and the prospect of unearthing a new favourite, or receiving a tip-off on a star performer of tomorrow is an occasion too rare to miss.
Ask your advisor if they organise regular whisky tastings, Masterclasses, or educational events.
Storing valuable whisky is much more simple than storing a fine wine, here are a few basic rules to follow.
Whisky Should be Stored in an Upright Position
Unlike wine, Whisky must be stored in an upright position. This is to ensure that the strong alcohol content does not saturate the cork, as this will cause the cork to decay and disintegrate.
Whisky does not require refrigeration, and can be stored at around room temperature – normally anywhere between 15 – 20 degrees Celsius. This temperature should be kept as constant as possible and storage near a heat source should be avoided.
Store Away From Direct Sunlight
It is always wise to store your whisky collection at a professional storage facility but if you do decide to store your collection at home, the following may be of some help.
Placing whisky in direct sunlight can be the single most damaging factor; always keep whisky away from direct sunlight – regardless of the colour of the bottle.
Important note: If stored in direct sunlight, whisky may change colour slightly over extended periods of time, and may be vulnerable to evaporation.
It is always wise to store a whisky in its original packaging or box.
Selling Your Whisky
A good advisor will probably offer a couple of different exit strategies. These usually include advice on selecting the most appropriate auction house or online business to use in the event of a sale; in addition to this, if your advisor professionally guides a number of clients, they may also offer you a route to a private sale.
Whisky has become a star performer at many of the big wine and spirit auctions over the years, and prices are at last reaching the levels befitting of such a rare commodity. Collectable whiskies sell for anywhere from a few hundred dollars all the way up to the record breaking US$ 1.1 million paid for a 60 year old 75cl bottle of The Macallan 1926 at Bonhams of Hong Kong. Auctions may well present the ideal transaction opportunity for buyer and seller alike.
Ask your advisor if an auction sale is right for you.
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A Brief Whisky Investment Guide
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