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Rare whisky tops luxury investment index

Rare whisky has topped the Knight Frank Luxury Investment Index (KFLII), rising in value by 40% in 2018, according to a new report.

Rare whisky was the leading asset on the Knight Frank Luxury Investment Index
Rare whisky was the leading asset on the Knight Frank Luxury Investment Index

Whisky was a new entrant to the KFLII, reaching the top spot. It was followed by coins, wine and art. Over the last 10 years, rare whisky has witnessed a 580% increase in value.

The growth has been partially attributed to the Asian market, as sales of Scotch whisky to India, China and Singapore rose by 44%, 35% and 24%, respectively, in the first half of 2018, according to the Scotch Whisky Association. Single malts now account for 28% of the value of all Scotch exports.

Published in the annual Wealth Report 2019, The Knight Frank Rare Whisky 100 Index (KFRW100) was compiled by analyst Rare Whisky 101 and contains 100 bottles of the world’s most desirable rare Scotch whisky and tracks UK auction prices.

Last year’s “most significant” sale was a bottle of 1926 Macallan featuring a hand-painted design by Irish artist Michael Dillon that broke the world record for the most expensive whisky after fetching £1.2 million (US$1.5m) at an auction in November.

Andrew Shirley, editor of The Wealth Report and the KFLII, said: “The stunning price growth of rare single malt whiskies shows that the appetite for new ‘alternative’ asset classes remains strong among high-net-worth investors.”

Andy Simpson, co-founder of Rare Whisky 101, added: “While rare whisky remains a somewhat fledgling asset class compared to some other passion investments, the market for rare and vintage bottles has witnessed extraordinary growth over the past 10 years, both in terms of the volume of whisky being traded and the value of that whisky.”

Looking ahead to 2019, Simpson said: “We see prices continuing to harden for the right bottles from the right distilleries, as well as increased interest in more affordable bottles from the second tier. But certain pockets could see a correction.

“To some extent we saw that with The Macallan 18-year-old index, which fell by 2.9% in 2018. This followed a 142% increase in 2016 and a further 35% increase in 2017, so perhaps an adjustment was to be expected.

“From a risk perspective, we believe the incidence of fakes can only increase while prices are so high and demand so robust.”

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