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Wine Investment FAQs

 

What do I need to know about fine wine to get started?

To get started you do not need to have much wine knowledge, though it helps to have an interest in wine. Cult Wines make suggested recommendations and provide easy to understand analysis on the investment potential of the recommendations. Cult Wines only focuses on investment grade wines.

 

Why do a lot of fine wines appreciate?

Fine wines mature over time with the very best wines highly restricted in supply and therefore the supply curve for these wines is almost perfectly inelastic. Secondly, demand is constantly rising. Not all fine wine appreciates or appreciates as fast as others, so it is important if you are looking to invest in fine wines that the right wine is selected. At Cult Wines we offer wine portfolio suggestions based on market analysis, ensuring you are best positioned for growth. 

 

What is the minimum amount I require to start investing in fine wine?

To open an account with Cult Wines is free and no minimum deposit is required. Should you wish to start investing we suggest starting with $5000 to $10,000 as this will allow you to build a balanced portfolio. Cult Wines however can however tailor a portfolio to suit almost any investment level.

 

How do I fund my fine wine investment account?

Upon registering for an account with Cult Wines you will be issued with a client account number which you can use a reference on all your investment payments. We accept many methods of payments including Bank Transfer and BPay. All your funds are held in an account with the Royal Bank of Scotland Australia, these funds are purely used for the sole purpose of building your wine portfolio.

 

How do I know that my wine portfolio is held in my name?

Once you have deposited funds with Cult Wines we will recommend and source an exclusive portfolio of wine for you. When we have made the purchase of the products then full titled ownership is passed to you and you will be sent a Certificate of title with your name, address, account number and storage details.

 

Do I have to have my wine delivered to my home or can you arrange storage for me?

We recommend that you have your wine investment stored in a facility that specialises in wine storage. Our storage partners London City Bond offer a secure and temperature controlled facility which will ensure your portfolio remains in the highest condition possible. Full storage is included in our low management fee. Of course if you wish to have your wine delivered for your own safekeeping then this can be arranged.

 

Will my wine portfolio be insured?

We believe that insurance is vital so as part of our fees we include insurance that will replace the wine at full replacement value as long as it is held with one of our partnered storage facilities. If you wish to take your own delivery we can advise on insurance companies that can assist you.

 

What are the fees and what does it include?

Cult Wines charge a flat all-inclusive 15% management fee which covers consultation, sourcing, storage, insurance and regular portfolio and wine investment updates. Should you decide to sell your investment via Cult Wines it will be subject to a 2.5% administration charge at the time of realisation. Cult Wines operates a transparent business model and does not have any hidden fees or charges.

 

Does Cult Wines help with resale?

We certainly do, through our network of registered wine exchanges such as Liv-ex, auction houses, fine wine merchants, when the time is right we can certain sell your wines on your behalf or assist you with the resale.

 

Will I receive updates on my portfolio?

We will regularly update you with recent auction activities and will issue you with valuations of your portfolio. In addition to this you can at any time log in to our secure client area to view your current holdings and current valuations. Our independent storage facility London City Bond will also issue you with unique online access so you can track the stock you hold.

 

Do I have to pay tax on my investment?

The tax rules depend on what country you are tax resident of but if you are a resident of Australia then there are potentially some CGT exemptions depending on the value and how the asset is classed and your tax adviser will be able to advise you accordingly.

 

How long should I hold my wine for maximum capital appreciation?

Like all good investments the medium to long term view will often bring better results. We recommend that with most portfolios you should take at least a 3 year view but it is certainly not uncommon to be able to see shorter term gains on a sought after release and we can certainly advise you accordingly. Of course if for any reason you need to realise your portfolio we can assist you at any time.

 

Can I drink any of the wine in my portfolio?

All wines that we source for your portfolio are of the highest quality and of course can be drunk, if you so desire, however we do recommend that they are primarily an investment with the aim of capital appreciation.

 

What are the advantages of investing in wine over other forms of investing?

Investing in wine offers many advantages over investing in stocks, managed funds, CFDs, forex, bonds etc such as:

 

Tangible – fine wine is a tangible asset, many financial instruments such as shares can go bust and bonds can default, but a bottle of Mouton Rothschild will always be a bottle of Mouton Rothschild!

 

Increasing global demand- over the past 5 years the fine wine market has seen strong demand from mainland China, Hong Kong and Russia as the rising wealth of these countries increases.

 

Decreasing supply – over time the number of bottles of fine wine for each vintage decrease as it is consumed, decreasing the supply over time. The supply/demand curve is very favourable for fine wine investing. 

 

Market Performance – fine wine returns have generally outpaced all major asset classes and provided double digit returns since 1988.

 

Diversification - investing in wine offers a genuine way to diversify your overall investment portfolio away from mass market financial products.

 

What are ‘First Growths’?

The pinnacle of Bordeaux investment wines, the group famed for their reliability and excellent global demand is the ‘First Growths’;Lafite Rothschild, Mouton Rothschild, Latour, Margaux & Haut Brion. These are traditionally considered the ‘blue chips’ of the wine world, and produce wines of exceptional quality year on year. The superb output of the First Growth châteaux has earned them a global reputation that is enough on its own to guarantee continuing demand.

 

If you have any further questions please call our expert team on +61 (3) 9034 5255 or email australia@cultwinesltd.com and one of our expert wine advisors will be delighted to help.

 

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