How to Invest in Whisky

Where can I buy investment-grade whiskies?

You can buy bottled fine whiskies at specialized whisky merchants, and at established auction houses like Sotheby’s and Christie’s. It can also be worth it to buy whisky directly from small distilleries, including those you may encounter while traveling abroad. In every case, it is important to buy whisky from trusted sources only.

What should I pay attention to when storing whisky?

Properly storing your whiskies is essential for investing successfully. Pay attention to these factors:

• Temperature: The optimal storage temperature for whisky is between 15 and 20 degrees Celsius. Major and regular fluctuations in temperature should be avoided completely.
• Light: Whisky should be protected from direct light, so storing it in complete darkness is important. Ultraviolet rays not only adversely affect the whisky itself, but they can also bleach the labels that identify bottles.
• Humidity: Your storage room should have atmospheric humidity of between 50 and 60 percent.
• Position: Unlike wine, whisky bottles should be stored in an upright position. This helps to prevent the corks from becoming damp and porous.

If you do not have access to a suitable storage room, you can store your whisky with a specialized storage provider. It is also possible to store whisky in a bonded warehouse. However, using external storage providers costs money, and this detracts from your potential returns.

Can I get insurance for my investment whiskies?

Whisky stored in your home is covered by your household insurance. If your whisky collection gains in value, then the sum insured by your household insurance may no longer be sufficient to cover your collection and your other personal property. For that reason, you should occasionally adjust the sum insured to match the current value of your personal property. It is important to note, though, that household insurance only covers the basic cost of your whisky and not its collectible value.

Are there other ways to invest in whisky?

There are ways to invest without buying physical bottles of whisky. These investment solutions are available:

• Whisky barrels: Some distilleries let you buy whisky in barrels. This is normally whisky that is still in an early stage of the maturing process. Investors who buy these barrels speculate that the whisky will gain in value as it matures, so that it can be sold at a profit later on. You can buy barrels directly at distilleries, or through specialized whisky brokers. The Whiskey & Wealth Club (United Kingdom) is one example of a whisky broker. This broker stores investor’s whisky barrels in a bonded warehouse. When investing in whiskies through brokers, make sure to account for all possible fees.
• Mutual funds: There are actively-managed mutual funds that invest in whisky. These funds often have relatively high fees and their investment criteria are not always transparent.
• Whisky stocks: You can also participate in the whisky market by investing in the stocks of companies involved in the production or trade of whisky. One example is the Japanese company Suntory, which owns numerous international whisky brands. An advantage of investing in stocks over buying physical whisky is that you may receive ongoing dividends. In order to buy shares in companies, you need to have a stock brokerage account. You can compare stock brokerage accounts from Swiss banks using the online trading comparison on moneyland.ch.
• ETFs: There are currently no exchange-traded funds (ETFs) that invest solely in whisky. However, there are ETFs that invest in the beverages market on a broader scale. The Advisorshares Vice ETF (ISIN: US00768Y5454) is one example. The advantage of using ETFs instead of individual stocks is that your money is invested in many different companies instead of just one, so the risk of losing money is much lower than when you invest in just a few stocks. However, you should be aware that when you invest in an ETF that focused on just one industry sector, your investment is dependent on that one sector. So the risk is higher than when you invest across many different industry sectors. You can buy shares in ETFs using a stock brokerage account.

More on this topic:
How to invest in wine
Ways to invest money in Switzerland explained