One of the biggest mistakes investors can make is focusing too much on one asset class, such as stocks, bonds or real estate.
These traditional asset classes are usually considered the foundation of any portfolio, but it’s also important to consider potential alternative investments, some of which have achieved even better long-run returns.
Knight Frank’s Wealth Report offers an excellent insight into the assets that have and haven’t done well over the past decade. According to the report, most wealthy individuals saw their net worth decline by a double-digit percentage last year, with investments in stocks and shares leading the way. On average, equity investments slumped by 18% last year.
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On the other hand, alternative assets, such as art, watches, wine and whisky, yielded a strong positive return.
The price of rare whisky increased by 3% last year, which looks favourable compared to equity market declines – but this is only part of the story. Whisky has been by far the best-performing alternative asset class over the past decade, according to the index.
In the past ten years, the average price of rare whisky bottles has increased by a total of 373%. Rare vehicles are the only other alternative asset class that’s even come close to this, with a cumulative increase of 185%.
Cask Scotch whisky is in high demand
Other sources suggest that Scottish whisky has recently outperformed the global results described in the Knight Frank data. A recent industry report on the Scottish whisky market noted an increase in cask prices of 14.9% in 2022. The research identified Laphroaig as the best-performing Scotch whisky cask distillery of 2022, with the prices of its casks jumping 18.8%.
The entire Scotch whisky category has benefited from the removal of import tariffs on single malt Scotch whisky in the US, and there’s hope that a free trade deal with India will increase supply to this market – the largest for Scotch whisky in the world.
The Indian market is already showing promise. Diageo - owner of the Johnnie Walker brand of whisky and the world’s largest spirits producer - reported a double-digit increase in sales at its Indian arm in its latest financial year. Worldwide, the group’s Scotch whisky sales jumped 25%.
Overall, the total value of Scotch whisky exports exceeded £6bn for the first time in 2022, as drinkers and investors alike woke up to the opportunities in the market.
While the market for Scotch whisky does have attractive growth prospects, it requires skill to know where to look for the best returns – buying a couple of bottles of Scotch from the supermarket won’t cut it.
That’s why it’s important to have an experienced adviser to help you through the process.
An experienced adviser service
Vintage Acquisitions (trading name of Brooks & Whitaker Limited) helps investors identify and capitalise on opportunities in the Scotch whisky cask market.
The company is committed to bringing investors the most sought-after, premium-grade cask whisky. It has access to distilleries other providers may not be able to offer thanks to its years of experience in the industry. Vintage Acquisitions works only with distilleries that have a proven track record of excellence and helps its clients purchase a “young” cask sourced from renowned distilleries.
With a young cask, investors can wait for the cask to mature gracefully – the longer the wait, the greater the increase in quality (and value). Vintage Acquisitions works with investors throughout the process, helping to buy, store and eventually sell the cask.
Fully licensed by HMRC, Vintage Acquisitions allows investors to manage their holdings through a secure, interactive online portal, which also provides access to all documentation. All casks are stored safely in an insured, bonded facility, meaning they’re free from duty and tax, and there is a choice of six flexible exit strategies when the time is right.
As an added bonus, cask whisky is capital gains tax-free. It can also have inheritance tax benefits, useful for estate planning, although this will depend on your personal tax situation and is subject to change.
Sam Brooks, Founder of Vintage Acquisitions added “Purchasing casks of single malt Scotch whisky is rapidly becoming a popular choice for both new and seasoned investors looking to secure long-term personal gain, or alternatively for a child's future.”
To find out more about the purchase process, storage and insurance, download your Whisky Cask Investment Guide at www.vintageacquisitions.com
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