Vinovest Review – Investments Aging Like a Fine Wine
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Whenever we think about investing, the first thing that comes to mind is the stock market. And then maybe bonds or mutual funds followed by real estate. But if I asked you about an alternative investment, you'd probably nudge it away, saying it's too risky. Have you ever considered investing in art, a business, or a farm?
You love wine, but have you ever considered investing your money in it? Well, alternative investments are gaining ground, and considering the market's current situation, it looks like they will stand their ground in the long term. Art and wine have a solid track record for generating returns and look attractive because they do not correlate with the stock market. The market value of wine will have nothing to do with the stock market. However, there is an entry barrier in the wine industry. You will have to commit a lot of money to buy wine and then put money to insure, store, and protect them. This might not be possible for all of us.
And this is where Vinovest comes into play. It makes fine wine investing easier and more convenient.
In this article
What is Vinovest?
Founded by Brent Akamine and Anthony Zhang, Vinovest is an investing platform that lets you pick wines you want to buy for yourself or purchase shares in a fund. It has a user-friendly portal to open an account and start with just $1,000. The biggest advantage of Vinovest is that you do not need to worry about storing the wine. They will store them for you at the insured facility.
With Vinovest, you do not have to commit anything when you sign up. You can pick the wine up later.
Related: Assets That Appreciate in Value
One place for all your investing
Options Trading
- Get up to a $0.18 rebate
- No commission or per-contract fees
High-yield cash
- Earn 5.1% APY*
- No fees. No subscription required.
Bonds
- 6% Yield or more
- Explore thousands of bonds yielding 6%+
How does Vinovest work?
Vinovest offers an easy and quick process to get started with wine investing. On the website, you simply need to open an account or log in using your account credentials.
Create a new account on the platform and choose the type of account you want. The managed account will be handled by wine experts at Vinovest and is ideal for those who are only starting in wine investment. The other is a trading account suitable for more experienced and hands-on investors.
There are four membership tiers, and they have varying minimum deposit requirements.
- Starter: This basic tier requires a $1,000 minimum balance with a 2.50% annual management fee. It offers full insurance for the wine and lets you choose from a range of storage facilities worldwide.
- Plus: The second tier, Plus, requires a minimum balance of $10,000 and will have a management fee of 2.35%. It comes with access to rare wines not included in the Starter tier and offers a bi-annual review from the portfolio manager.
- Premium: With a premium account, you need a minimum balance of $50,000, and the charges drop to a 2.15% annual fee. It will give you access to rare wines only available at auctions, and you can also invest in wine futures.
- Grand Cru: The last tier has a minimum balance requirement of $250,000, and the annual fee is 1.90%. It will allow you to invest in the world's most exclusive wines and offer personalized reports every quarter, besides access to the Vinovest advisory council.
You can pick the Starter account and deposit $1,000 to start as a beginner. You will now be assigned one of the three primary portfolios. These include conservative, balanced, and aggressive.
Based on the answers you provide, Vinovest will select an investment portfolio for you. Here are brief descriptions of the same:
- Conservative portfolio: The wines in this portfolio only come from established wineries across the mature wine markets. They stabilize your portfolio and remain insulated from the swings in aggressive wine investments from lesser-known markets or wineries.
- Balanced portfolio: In this portfolio, the wines will come from more established wineries with consistent pricing.
- Aggressive portfolio: In an aggressive portfolio, you will get wines from wineries in the emerging wine markets and those with returns above the balanced and conservative portfolio wines.
In the next step, you will see a questionnaire on the website asking you to pick the risk level and investing preferences. This will help Vinovest to create a fully customized and fully managed portfolio. Based on your answers, the professional team will auto-invest in a wine ideal for your risk appetite that can provide the best returns.
Vinovest account uses an algorithm that creates a customized portfolio based on the answers. It will show the wines they will invest in for you. In the last step, you fund the account and begin investing.
If you want to learn more about each wine, just click on it and get all the details.
Your profile is now ready, and you can browse bottles of wine. Invest in the ones you like. Using the platform, you can easily manage and monitor the portfolio. It is possible to store the wine in one of the fully monitored wine storage facilities offered by Vinovest. Alternatively, they can ship the bottle to you.
Vinovest wine also offers a package where they will pick wines for you, but the minimum investment increases to $50,000.
Whenever you buy wine through the Vinovest portfolio, you get the actual wine, not interest or ownership. Hence, they agree to store the wine in their storage facilities. Ownership of the wine will legally pass to you, but it does not become the asset of Vinovest. Buying and selling wine will work like any other investment class, and any gain or loss will qualify for the capital gains and loss treatment, irrespective of the type of investment account.
One place for all your investing
Options Trading
- Get up to a $0.18 rebate
- No commission or per-contract fees
High-yield cash
- Earn 5.1% APY*
- No fees. No subscription required.
Bonds
- 6% Yield or more
- Explore thousands of bonds yielding 6%+
How much does Vinovest cost?
Vinovest charges fees to fund the operations, including insuring, storing, and transporting the wine. They charge a 2.50% management fee, which covers all the services offered on your investment. If you invest $50,000 or more, the fees will come down to 2.15%. This fee will be collected using the uninvested funds in your account.
Vinovest features
Vinovest Managed Account
Vinovest's managed account is ideal for those who want to take a hands-off approach toward investment. You simply deposit the funds, and Vinovest will handle the rest for you. Based on the answers to their questionnaire, it will take about two to three weeks to build your portfolio.
Vinovest Trading Account
This account is suitable for those who have knowledge of investment-grade wine and want to choose it themselves. You can buy and sell bottles of wine just the way you trade stocks. In this account, you can choose the wine and completely control the listing price when you buy or sell the bottle. There is no account minimum or hold time in this account.
Expertise
Vinovest has advisors who have mastered the skills of winery business. They select investable bottles based on their knowledge, not biases or personal preferences. They work with a wine like a business and not a consumable good.
Storage
If you buy a bottle of wine, you must arrange to store it safely. The cost of a wine cellar can be significantly high when you have several bottles you have invested in. Maintaining the right temperature and humidity when storing wine is crucial, and Vinovest does it for you. Once you invest, you do not have to worry about storage costs.
Insurance
Insurance for collectibles is not cheap, but it is necessary. Buying vintage insurance would be worth it when you invest a few hundred thousand dollars in wine, but you do not need to take the hassle if you invest only a few thousand dollars in wine. Vinovest will handle it for you.
Wine Futures
The wine investing platform offers an opportunity to buy wine still in the barrel. It is known as En Primeur or wine futures. This facility is only a small part of their offering, but worth considering.
Who should invest in a wine
Those who seek portfolio diversification
Wine is an alternative investment and can be an ideal addition to your portfolio. It will help diversify your portfolio, and you will not see it lose its value when the stock market is down since it does not correlate with wine. Wine can be a great choice if you do not want to invest in stocks, mutual funds, or bonds.
Who shouldn’t invest in a wine
Those with a short-term horizon. You need to identify your investment horizon before you invest in wine. It is not for the short term, and you will not be able to enjoy returns if you want immediate liquidity. It is only suitable for portfolios that have long-term investment criteria.
One place for all your investing
Options Trading
- Get up to a $0.18 rebate
- No commission or per-contract fees
High-yield cash
- Earn 5.1% APY*
- No fees. No subscription required.
Bonds
- 6% Yield or more
- Explore thousands of bonds yielding 6%+
Pros and cons
Pros
- Portfolio diversification. Using Vinovest to invest in wine, you can achieve portfolio diversification.
- Handle market risk. Wine is not related to the stock market, and when the market is down, your wine portfolio will remain stable due to the expertise of the Master Sommeliers.
- High returns in the long term. If you can hold your investment for a longer tenure, there is a high potential of enjoying strong annualized returns.
Cons
- High minimums. You don't need to be an accredited investor, but you will have to make a high minimum investment to own quality wine that grows with time.
- Shipping and storage costs. The shipping and storage costs could be considerably high if you plan to manage them yourself.
- Long holding period. There is a potential to enjoy strong returns after a long holding period. If you plan to sell the wine immediately, it might not give any returns.
Vinovest vs. Competitors
Want to know how Vinovest stacks up against its competitors? Here’s what they look like side-by-side.
Company | Minimum investment | Fees | Do you own the wine bottle |
Vinovest | $1,000 | 2.50% | Yes |
Vint | $25 | None | No |
Cult Wine Investment | $35,000 | 2.75% | Yes |
Sommtrust | $1,000 | 2.70% | Yes |
Liv-ex | $440/monthly | 3% | Yes |
Vint
Using Vint, you can buy or sell SEC-securitized shares of wine and get started for as low as $25. However, in this case, you do not own the wine. It has no minimum or no monthly fees. Remember that you buy shares of wine, not actual wine bottles. Hence, there is no cost of insurance and storage. So, no fees or investment tiers.
Cult Wine Investment
With Cult Wine Investment, you get started at a minimum of $35,000; with higher investment, you enjoy bigger benefits. Its Cult Cru option will offer a portfolio based on your risk appetite, investment horizon, and return expectations. With a $700K investment, you enjoy complete customization and a dedicated relationship manager. It has a very easy-to-use platform and offers investment options as high as $1.5 million.
Sommtrust
You can have a professionally managed wine portfolio with low costs through Sommtrust. It is similar to Vinovest and has a minimum investment requirement of $1,000 with a management fee of 2.70%. It has two tiers to choose from- Basic and Custom. With the Custom tier, you enjoy a lower management fee, and the minimum investment requirement is $50K.
Liv-ex
Another platform that makes buying and selling wine easy and convenient, Liv-ex allows you to make your transactions at the right rate, and there are more than 16,000 products listed on the portal. It offers three membership plans, and the lowest starts at $440 a month with a 3% commission. The commission reduces with higher membership tiers.
FAQs
Is wine investment for me?
Only you can decide if wine investment fits in your investing strategy or not. It does offer portfolio diversification and decent returns but whether it fits your portfolio or not will depend on your investment horizon, investment goals, and risk appetite.
What is the risk in wine investment?
All investments come with a certain amount of risk and you need to consider your risk appetite before making a decision. However, wine does have a lower risk as compared to the stock market. Its retail price does not rise one day and fall on another. They remain steady for a significant amount of time and the value rarely decreases. The more scarce the wine, the higher its potential to rise in value.
How will I know which wines to invest in?
Unless you have years of knowledge and skills in identifying the right type of wine, it is best left to the professionals. At Vinovest, there are experts who will build your portfolio based on your investor profile and will choose the best wines for you.
One place for all your investing
Options Trading
- Get up to a $0.18 rebate
- No commission or per-contract fees
High-yield cash
- Earn 5.1% APY*
- No fees. No subscription required.
Bonds
- 6% Yield or more
- Explore thousands of bonds yielding 6%+
The bottom line
Whether wine investing is ideal for you will depend on your risk appetite and financial goals. As an investment, it offers returns and has lower volatility than stocks. But there can be large swings as well. There is no exchange where people buy and sell bottles like there is with the stock market, but there is a potential for long-term gains.
Wine investment can offer a good change from the stock market, and Vinovest does an excellent job of making the investment process simple and easier for you.
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Editor
Vandita Jadeja is a financial writer and editor at Joywallet. She loves to read and write about money and brings a decade of experience from the financial industry.
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