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This Asset Class Historically Popular With Ultra Wealthy Investors Has Long Been Overlooked By The Masses One Company Is Changing That

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By James Wells, Benzinga

When it comes to investing, the focus is often directed toward assets like stocks and bonds. However, as investors seek greater diversification and portfolio resilience, alternative investments have gained in popularity. Real estate, gold, and the digital gold of our era, Bitcoin, have all claimed their rightful place in the investment landscape.

Nevertheless, despite the growth of alternative asset investing, wine and spirits have long been overlooked. This is in large part due to the steep learning curve of wine investing, which involves challenging details such as valuing specific producers or vintages, or securing allocations from coveted producers.

However, with the advent of investing platforms like Vint, wine investing is becoming more accessible. Much like a fine wine that needs time to reveal its true character, these assets have been quietly delivering consistent returns.

Alternative Assets Don't Correlate With Traditional Markets

The core advantage of alternative assets is their lack of correlation with traditional markets. This means that when stocks and bonds are underperforming, alternative assets like wine and spirits can still thrive. Alternative assets play a key role as a hedge against inflation, while providing exposure to lucrative niches and industries.

Take the last two years for example. In the US, inflation has been sky-high due to the overheating caused by Covid-19 relief. However, despite the escalating cost of living, the potential value of fine wine, attributable to its limited availability, may also rise, offering a safeguard against the eroding effects of inflation.

Wine And Spirits As An Asset Class

Wine and spirits have historically proven to be a robust asset class. They have shown resilience in times of economic downturn and have consistently delivered impressive returns irrespective of market conditions.

Like other solid alternative assets like real estate or gold, wine and spirits elevate the risk-adjusted returns of the classic 60/40 portfolio.

The following tables compare the returns of hypothetical portfolios, one with a classic 60-30 allocation to stocks and bonds with a 5% allocation each to commodities and real estate, and another with a 5% wine & whiskey, over a 20-year time period.

Portfolio Without Wine (2004 – 2023):

2004-January 2023 Portfolio (Without Liv-ex)

% Allocation

Return

Portfolio Return

Stocks U.S. (S&P 500 Based)

60.00%

261.34%

156.80%

Bonds U.S. (VBTLX)

30.00%

-5.72%

-1.72%

Commodities (S&P GSCI Index)

5.00%

99.00%

0.4%

Real Estate (VGSIX) REIT Based

5.00%

99.34%

4.97%

Totals

100.00%

160.46%

Source – Vint 2023

Portfolio With Wine (2004 – 2023):

2004-January 2023 Portfolio (With Liv-ex)

% Allocation

Return

Portfolio Return

Stocks U.S. (S&P 500 Based)

60.00%

261.34%

156.80%

Bonds U.S. (VBTLX)

25.00%

-5.72%

-1.43%

Commodities (S&P GSCI Index)

5.00%

99.00%

0.40%

Wine (Liv-ex-1000)

5.00%

376.30%

18.82%

Real Estate (VGSIX) REIT Based

5.00%

99.34%

4.97%

Totals

100.00%

179.56%

Source – Vint 2023

Exposure to a basket of fine wine assets represented here by the Liv-ex 1000 a 5% allocation to this asset helped boost portfolio returns by roughly 20% over the past 20 years.

The Case For Wine And Spirits

There are several advantages to investing in wine and spirits:

The Slow Pour: Consistent Returns from Wine

Fine wine, the silent performer of the investment world, has been steadily filling investors' glasses with robust returns.

Over the past 15 years, this alternative asset investment has yielded a 13.6% annualized return, surpassing the performance of many global equities. Put simply, this implies that investors have the potential to double their investment in a span of roughly six to seven years.

Low Correlation With Traditional Markets

Like real estate, gold, bitcoin, fine wine and spirits offer a low correlation with traditional assets. This makes them an exceptional addition to a diversified portfolio.

Low Volatility

A unique property of wine is that the longer you hold it, the less volatile its price becomes. This is a byproduct of a supply and demand imbalance.

Namely, as each bottle is savored, the remaining ones become rarer, and their value increases. It's a testament to the law of supply and demand, a principle as timeless as the art of winemaking itself. This makes wine and spirits a great choice for risk-averse investors.

Real Assets

Investing in wine and spirits is more than a financial endeavor; it's a journey through history. Each bottle is a real asset, a tangible piece of history, a work of art, and, most importantly, a testament to the craftsmanship of its creators. This characteristic alone differentiates wine from several other asset classes such as cryptocurrencies and equities.

Vint: A New Era Of Wine & Spirits Investing

Vint is a pioneering platform that makes investing in wine and spirits accessible to everyone. Here a some of the core ways Vint is pushing the envelope for the wine and spirits asset class:

Collections Curated by Experts

Navigating the world of wine and spirits can be as complex as understanding the nuances of a fine Bordeaux. That's where Vint comes in.

Vint offers expertly curated collections, simplifying the investment process for investors at all ends of the spectrum. This allows investors to leverage diversified and unique collections based on market data and trends.

Securitized Wine & Spirits

Vint is the worlds first self-directed and transparent wine and spirits investment platform. They securitize world-class assets, creating opportunities in a historically inaccessible asset class. This innovative approach brings portfolio efficiency and offerings qualified under the SECs REG-A+ framework.

The Future is Bottled

As the boundaries between the digital and physical worlds blur, it's easy to overlook the tangible, timeless investments like fine wine and spirits. Investing in wine and spirits isn't a privilege reserved for the wealthy but a lucrative opportunity now open to all.

With Vint, investors can uncork the potential of these assets, savoring the taste of diversification, resilience, and impressive returns.

Founded in 2019, Vint set out to financialize fine wine and spirits and create a new asset class. Vint received SEC qualification in 2021, thereby creating the first fully-transparent, efficient platform for wine, spirits, and futures collection investing. Vint offers expert-curated, thematic collections of fine wine & spirits to institutional, accredited, and non-accredited investors. Since launching, Vint has securitized and offered over $6M worth of assets. Through Q3 2022, Vint has generated returns of 28.3% for asset exits on a net annualized basis since inception. Vint is backed by leading investors Montage Ventures, MS&AD Ventures, Goat Rodeo Capital, Fintech Ventures & Slow Ventures. To learn more about Vint, visit Vint.co.

This post contains sponsored content. This content is for informational purposes only and not intended to be investing advice.

Contact Details

Brady Weller

Brady@vint.co

Company Website

https://vint.co/

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