IIp10-13_Wine.qxd 12/1/09 15:43 Page 5
International investment | 13
Comment from Robert Lench,
Managing Director, Vinum Fine
Wine Fund
Fund overview
This is a wine investment Fund that aims to
achieve above average investment returns over
the medium to long term. Medium term is
defined as between three and five years.
The Fund trades in a diverse portfolio of fine
and rare Bordeaux wines. The managers seek to
strike a balance of holding stock long term and
taking gains for re-investment/additional diversi-
fication. The managers’ network of specific buy-
ing opportunities will be identified for the
benefit of the Fund.
Market commentary
“Opportunities are never lost. Someone will take
the one you miss.” Unknown Author
The continuing problems in all areas of the
UK economy and that of the world generally are
now a regular and continuing feature for every-
one. There seems little prospect of any early res-
olution to these problems.
For investment advisors, this creates a huge
issue of uncertainty and doubt in the minds of
investors. With this in mind, defensive strategies
for investment tend to be the current trend of
activities.
In such uncertain times and with many areas
in uncharted territory, such as the current ster- the markets and economy generally turn Chateau represents £225,000 spread across 13
ling/euro exchange rate, seeking areas of stability positive. vintages.
and minimising investment losses is the order of Given the current lower prices, the Specialist We have taken a strategic stake in wines where
the day. Wine Advisor now has opportunities to pur- we can perceive both demand and shortage of
We have long espoused the view that wine chase excellent wines at very competitive prices, stock. This will ensure that gains can be taken
will not be immune to the general financial therefore benefitting the Fund further in the from the holdings.
issues affecting all asset classes. We do, however, medium to longer term. The objective of the managers is to hold long
contend that historically wine has been less term and not be a regular trader, other than to
volatile and the rate of decline is comparably less Investment rationale purchase as new monies flow in. Where appro-
rapid compared to other asset areas. This is The largest exposure to one chateau in vintages is priate, profits will be taken to create liquidity and
demonstrated by the figures for October: 13. The single largest financial stake in one allow other opportunities to be accessed.
Liv-ex 100: -12.4%
FTSE 100: -10.7%
DOW: -14.1% Pie chart of communes by value
CAC 40: -14%
The Vinum Fine Wine Fund recorded a fall of
St Julien 7.08% Margaux 5.31%
only 1.55% in October. This comparative per- St Estehe 0.32%
Pauillac 3.27%
formance reflects the range of wines and vin-
Pessec-Leognan 6.4%
tages held by the Fund. This demonstrates the
St Emillion 38.92%
benefits of a managed portfolio of wine in terms
Pomerol 18.60%
of outperforming other collections of wine, such
as the Liv-ex index. As stated, wine as an invest-
ment is not immune to the general problems of
the wider investment world. However, with good
management and selection of rare and fine
wines, we can significantly minimise any decline
in values. This is obviously an important aspect
for advisors as maintenance of value and min-
imising downside is crucial. Further, with the
anticipated limited falls in value, we would
Sauterne 19.87%
expect this asset class to rebound quickly when
www.investmentinternational.com January 2009 Investment International
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