(NOTE: Whisky in most places is spelt “Whiskey”, however in Scotland it is spelt “Whisky” without the “e”, so as this is where my Whisky investment is, that’s how I spell it).
I recently decided to start investing in Maturing Scotch Whisky. This is a new investment class for me which I’m excited about. From my research, it appears to be a solid investment opportunity and I intend to build a significant portfolio over time, mostly purchasing newer releases & then holding them through WhiskyInvestDirect.com (see full platform review) until they are around 5 to 7 years old.
As a brief background; just about ALL Scotch Whisky increases in value with age. That’s probably not new news to anyone, but the process is interesting, and the implication of that fact as far as someone who is looking to invest in whisky, is even more interesting.
After the whisky’s are distilled, they are placed into a cask to mature, and stored in a large, secure, climate controlled area (warehouse typically) while they mature.
At some point, usually when the whisky is between 3 and 12 years matured, they are bottled and sold. Depending on the type of whisky (malt, grain), distillery, date of distillation, type of casks etc., they are either mixed together to make a “blend” (about 90% of all Scotch Whisky is blended), or they are sold as a “single” if they are good enough. Between the distillation and bottling phase, (the “maturing” phase), these whisky’s increase in value significantly. It is that maturing phase which is the best to invest in whisky in order to take advantage of a lower-risk investment with very reasonable returns.
The other interesting point (which was also a big part of why I decided to invest in whisky) is that there is generally no UK Capital Gains Tax (CGT) on maturing cask whisky as it is classed by HMRC as a “Wasting Asset” so this helps to add to the overall profits. Of course speak to your accountant, do your own research, and don’t just take my word for it as with anything on this site.
If you are interested in my overall research on investing in whisky, this was my initial writeup: My First Investment in Maturing Scotch Whisky.
My Whisky Portfolio Strategy
In October 2022 I decided to exit my whisky portfolio. In the weeks running up to October, there had been several bulk-bid-buys by bottling companies and other retailers. They were paying over the odds (10%-20% above market in some cases) so by the time I had accepted those, my portfolio was down to about £15k invested. I tried to add to it but when they have new whisky to the market, there is so much money waiting to get in you’re lucky if you can get a couple of hundred pounds invested. Looking at my account I had made over £8,500 in profit in the course of about a year, on an investment of about £18k. There is a cost involved for storage, insurance etc. So as the prospect of getting more capital invested didn’t look good, and managing an account with just 15k in it didn’t seem worth it, I decided to exit the account.
As a mentor used to tell me; “it’s never wrong to take a profit” so that’s what I decided to do. I sold out everything and decided to put the money in the bank for now (at 5%) and wait to see what happens in the whisky market. If things calm down and it becomes easier to get more capital invested, I’ll likely get back in. For now though, I’m happy with that level of profit so I’ll have a glass of whisky and watch the market for the future.
Maturing Whisky Portfolio Returns
(Click Image for Interactive Charts)
(Returns are currently negative or low as I am still in the process of building the portfolio, so purchase commissions & storage fees are a factor)
Latest Account Screenshot of my personal WhiskyInvestDirect account.
Maturing Whisky Portfolio Tracking Sheet (live Google Sheet)
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