The Hows And Whys Of Wine Investment And Wine Fund

Unlike investing in stocks and bonds where you only get to own apiece of paper, investing in fine wine does offer some quite unique feature,you own the physical asset and you can drink the fine wine. Hence there isalways a romantic notion about wine investment, which is that you can buytwo cases of young wine so that, after a period of maturation, you candrink one and sell the other to finance the purchases of another two cases.This fascinating self-perpetuating is actually misleading to someone who’sseriously considering fine investment.When it comes to wine investment, one should know there is vital asonly1%of the worlds wines are classed as investment grade or Blue Chip.Wines from the Bordeaux regions of France make up most of this1%.While you can create you wine portfolio either by En Primeur or goingthrough merchants after the wine is bottled, you must understand thatunlike stocks and bonds, you can’t use a math formula to calculate theprice of Fine wine, it’s driven by supply and demand. It is very importantto serious wine investor to understand the price of the same wine can varya lot depends on its provenance. Provenance: The source of the Wine;Storage Conditions and Distance traveled from Chateaux will decidewhether the wine can realize its maximum value.Wine investment needs expertise, if investors want to take advantage ofits low correlation with other asset class to diversify his portfolio andachieve a decent return. Wine fund would be a good choice for investorswho have little or no knowledge of wine market or simply just want hasslefree. When invest in Wine Fund, investors are not taking ownership of theactual commodity but are buying paper wine. They are relying on theexpertise of the fund manager to select fine&rate wines on their behalf. With the rapid economy growth, we see more and more demand fromChina, for fine wines such as Chateau Lafite and Latour. More high networth people likes to enjoy fine wine and invest in fine wine. Due to lackof knowledges of the fine wine market, they often make mistakes ininvesting wines. To seize this opportunity, we will setup our wine fund, byfollowing the international standard and leverage our relationship withworld famous wine collector to acquire the fine&rate wines withprovenance. Our wine fund will also use Liv-ex to value the NAV. The firststage of our wine fund is aiming to provide investors decent return. Thenext stage we want to achieve is to build a wine cellar in bond area underinternational standard so we can provide an online Fine Wine tradingplatform for inenvestors/brokers/dealers.