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Investors turning to art, wine and whisky to hedge against COVID


Investor attitudes are changing with individuals turning to alternative investments to hedge against market volatility, resulting from the coronavirus pandemic. New research by cask whiskey investment leader, Whiskey & Wealth Club reveals.

The 2020 Cask Whiskey Buyer Report shows four in 10 investors are looking to alternative investments to secure their wealth and spread risk amidst the pandemic. Some 30% fear losses from market volatility brought on by Covid-19, which has seen the UK economy shrink by a fifth.

Connecting whisky investors with Scottish and Irish distilleries

Whiskey & Wealth Club is a wholesale whiskey company that connects individual investors with authentic and premium Irish and Scottish distilleries. The distilleries make casks of new make spirit available to Whiskey & Wealth Club at a wholesale rate that are then released to private individuals at significantly discounted rates.

Whiskey & Wealth Club manages storage and insurance as standard, allowing the whiskey to mature in maintained, government bonded warehouses. Investors can then decide when is best for them to sell their mature whiskey or bottle to enjoy themselves.

Commenting on the report findings, Whiskey & Wealth Club CEO, Scott Sciberras, said: “This pandemic, has far-reaching global financial implications, impacting investor behaviour. Investors now are looking to spread risk and hedge against market uncertainty during this pandemic.”

Investors turn to alternatives to spread risk

When asked, 89% of investors state they are turning to alternatives to spread risk. Elsewhere, 64% are currently seeking the reassurance of something asset-backed, while 61% take pride in physical investments.

Art (31%), is currently the most appealing prospect for investors looking to alternatives, followed by antiques (28%), wine and watches (both 24%). All of which can be capital-intensive, come with high fees and the prevalence of counterfeits, which increase the risks.

What is the appeal of cask whiskey investment?

Cask whiskey as an investment is becoming increasingly appealing. Thirty-two per cent of investors are willing to invest in casks of premium Irish whiskey or Scotch whisky. Yet, when presented with further information on potential returns, market state and exit strategies, this rises to 55%.

Globally whiskey’s popularity has soared in recent years and is set to continue increasing the demand for aged spirit. Currently, the Scotch whisky secondary wholesale market is estimated at $40m according to the IWSR, the global benchmark for wine and spirit data. Last year alone, exports grew to a record £4.9bn.

Irish whiskey is also amid a resurgence. Exports have grown by 300% in the past decade, with the US market worth $1bn alone.

Jay Bradley, founder of Whiskey & Wealth Club, concludes: “The more ‘traditional’ alternatives, such as art and antiques and watches are the most sought-after. Yet cask whiskey is becoming popular as an ever-appealing prospect for investors looking to negotiate this period of financial uncertainty and meet their changing needs.”

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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