Alternative Investments and Diversification
Globally, the appreciation in the sale values of fine single malt and grain whisky has added to investors’ interest in the commodity. Indeed, when stock markets fluctuate, investors usually seek safe havens to protect their assets. If you are seeking to diversify your investment portfolio, we invite you to read on.
Over recent years, a younger audience and broader cross-section of consumers have come to appreciate quality Scotch and Irish whiskies, not least for their distinct heritage and romantic overtones. Enthusiasts tend to source their collections from private sources.
While the spirit has become a conversation point, it has also become attractive to investors. However, deciding whether mature Scotch whisky or Irish whisky is the right financial move for you involves more than just a discerning palate. Our experts recommend researching performance potential and maintaining a diverse portfolio of investments, too.
Firmly established as a worldwide business, whisky accounts for around a quarter of food and drinks exports from the UK. Notably, around nine-tenths of all whisky distilled in Scotland is sold abroad.
Demand for premium Scotch whisky remains buoyant, stoked by limited supply and international buyers. On the limited occasions when scarce varieties do come up for sale at auction or elsewhere, sale prices tend to reflect these market conditions.
In addition to approximately 120 distilleries in Scotland, there are around forty inactive ones. These so-called silent or ghost distilleries no longer produce new casks of spirit, but they still release aged whisky as it matures. Frequently, the rarity factor and goodwill associated with their names mean that the product is very much sought after; a golden opportunity, one might say.
Long Term Investment Reaching Peak Values
Such is the interest in these alternative investments that wealth management consultants Knight Frank publish data from a specialist rare whisky index. The associated report makes interesting reading. While the single grain market still represents only a fraction of the malt market, its performance metrics certainly seem to be heading in the right direction. Over the five years to 2019, the average auction selling prices of grain varieties increased by more than 32 per cent, for instance.
Of course, investments are always prone to fluctuations in value. Whereas gold has had its ups and downs, as have numerous other commodities, it has nonetheless delighted long-term investors by reaching peak values. In the same way, inspired choices of whisky have performed well over time.
To understand how whisky investment works in practice, including costs, storage, and exit options, see our full guide.
