4 min read · Sep 16, 2023
In the world of investment, there’s an age-old adage: “Don’t put all your eggs in one basket.” This wisdom is predicated on the idea that diversification can help mitigate risk and maximize returns. While traditional investments like stocks and bonds have been the cornerstone of portfolios for decades, astute investors have always sought alternative asset classes to achieve their financial goals. With economic uncertainty on the rise, many investors are looking for alternative assets to diversify their portfolios. Two popular alternative investments are whisky and gold. But which one offers better returns?
The rare whisky market has exploded over the past decade, with prices increasing by 586% over the last 10 years, according to Knight Frank’s 2022 Wealth Report. This makes rare whisky the top-performing collectible asset, outpacing other traditional investments such as art and stamps.
Several factors are driving the growth of the rare whisky market. One is the increasing demand for premium spirits from high-net-worth individuals, particularly in Asia. Another factor is the limited supply of rare whisky, which is due in part to the fact that it can take many decades for whisky to mature and become desirable to collectors.
The Scotch whisky industry is worth approximately £5 billion to the UK economy and accounts for around 25% of the country’s food and drink exports. With over 90% of Scotch production sold abroad, the global demand for rare and aged Scotch is higher than ever. Some of the most sought-after rare whiskies include Macallan, Dalmore, and Glenlivet. A bottle of Macallan 62-Year-Old Fine & Rare sold for a record $1.5 million in 2021.
“The luxury whisky investment market is booming”, said Garnet Harrison, Managing Director of Highland Cask Group. “The market seeks genuine rare and unrepeatable whisky. As supply is finite and demand increasingly high, the potential for long-term growth is enormous.”
Research from specialist whisky firms shows whisky has been a better investment than gold and global stock markets over the past 5 years.
According to research, a £100,000 investment in whisky casks in July 2018 would have grown to £214,000 by the end of 2022. The same £100,000 invested in gold would be worth around £151,000 today.
“Recent data clearly shows whisky as a top-performing alternative asset, outpacing traditional stock markets and commodities,” said Garnet Harrison. “Whisky has exceptional growth potential for investors looking to diversify”.
Nigel Kippax, a 60-year-old commercial manager who has worked in the same engineering firm for 30 years, invested £18,000 of his retirement savings in whisky three years ago. Speaking to iNews, Kippax said he has been pleased with the performance of his whisky portfolio compared to keeping the money in more traditional savings accounts. “When my fixed savings account matured, I was only being offered interest rates of 1–2%. I decided to withdraw some of my savings and invest in whisky casks instead,” he explained.
Kippax invested in three casks of Ardmore, Aultmore, and Deanston whisky through an investment company. At the time, each cask cost between £2,500-£5,000. Now, valuations indicate the value of Kippax’s whisky holding has grown significantly above his initial £18,000 investment. While not a huge whisky enthusiast himself, Kippax believes the category offers better returns than savings accounts in the current low-interest rate environment. He estimates his £18,000 whisky investment represents around 4% of his overall net worth, which includes his property, pensions, and other savings.
As with any investment, Kippax is aware of the risks involved with whisky casks. “If we had 50% of our money in whisky, I would be more concerned,” he remarked. “But at 4%, I’m comfortable with the amount I have invested so far.” Depending on how his initial whisky investment continues performing, he said he may look to increase his holding further for retirement. “I’ll see how things go over the next few years before deciding,” Kippax commented.
Highland Cask Group is a specialist whisky investment company that was founded in 2021. The company offers a range of whisky investment products, including cask investment, and bottle investment. Highland Cask Group has a team of experienced whisky experts who select and manage the company’s whisky investments.
The company has a proven track record of success, with its whisky investments outperforming the market on average. We have a team of experienced whisky experts who can help you choose the right casks to invest in. We also offer a range of support services, such as cask storage and insurance.
Garnet Harrison is the Managing Director of Highland Cask Group. Garnet Harrison is an expert in asset management and has worked with companies such as Schroder Asset Management and Heidrick & Struggles. Harrison’s expertise in asset management makes him well-suited to lead Highland Cask Group’s efforts in providing clients with the best possible returns on their investments.
Whisky can be a good investment for investors who are looking for an alternative asset that can offer good returns. Whisky has several advantages over gold as an investment, including limited supply, growing popularity, and tangibility. Highland Cask Group is a leading whisky investment company that helps investors buy and sell casks of whisky. If you are interested in investing in whisky, we encourage you to contact us today. We would be happy to discuss your investment goals and help you choose the right investment package for you.
