Tomoka Casks has just released our dedicated Q3 2020 Whisky Market Report with the latest findings from our expert whisky investment analysts. The unprecedented events of 2020 have left many investors confused as to where their money will be safe and how can they still get the best returns with such a volatile market. Our detailed report proves that whisky has continued to be a resilient and reliable alternative asset over the past year, making it a great option for investors looking to diversify and protect their capital.
Whisky Provides Hedge Against Covid-19 Uncertainty
“According to the Knight Frank Rare Whisky Index the whisky sector has surged 564% over the last 10 years, the highest growth of any luxury asset”, explains Jass Patel, whisky expert and CEO of Tomoka Casks. “Even during the ongoing Covid-19 pandemic whisky has remained very buoyant with consistent 5% growth across the sector.”
This exceptional performance and market confidence has translated into a dramatic uptick in interest from potential investors. Since the start of the Covid-19 pandemic in March over half of UK investors have expressed an interest in this unique alternative asset. Research shows that whisky is a preferred investment option for millennials, coming second only to property for this demographic.
Whisky cask investments in particular are a great way to shore up portfolios heavily reliant on traditional stocks and shares investments. Whisky is especially attractive right now due to very low correlation with other asset classes, with prices largely driven by the rarity and age of the cask and the reputation of the distillery.
A Reliable Appreciating Asset
Whisky is the only asset except for fine wine that consistently gains value as it ages. Cask whisky which can increase in value dramatically as it hits the 10-12 year mark. Investors can typically expect returns of 10-15% per annum, with returns averaging 13% over the past 5 years. Unlike bottled whiskies, cask whiskies continue to evolve as they remain in the cask, developing complex and highly sought-after flavour profiles.
Those looking to make their money work even harder should consider investing in casks of new-make spirit. These casks have not yet been aged for the requisite time needed for them to be called whisky. Investors can expect to make excellent returns on these younger casks; it’s not uncommon for casks of new-make spirit to double in value over a 5-8 year hold.
Multiple Lucrative Exit Strategies
Given the uncertainties on the wider markets, smart investors are looking for investments which offer several solid exit strategies. According to the IWSR (International Wines and Spirits Record), over the last 12 months the thriving secondary wholesale whisky market has been worth $40 million despite economic uncertainties linked to the Covid-19 pandemic. As well as the option to sell your cask directly to another investor on the secondary market, investors can also decide to bottle and sell the whisky. There is then the option to either sell all your bottles on the secondary market, or to retain some to enjoy yourself or to sell on at a later date.
Click the button below to download our full Q3 2020 Whisky Market Report and discover why more and more investors are embracing the resilient, low-risk whisky market to generate attractive and safe returns during these unprecedented times.