It’s tough to know where to invest your hard-earned cash these days. But if you’ve got a hankering for fine scotch, you might want to keep an eye on The Single Malt Fund, the world’s first publicly traded whiskey investment vehicle.
On paper, the Swedish fund sounds more like a boozy piggy bank than an investment opportunity. Yet it’s unique in that it actually owns a large collection of rare and limited edition whiskies, unlike funds such as the Spirited Funds/ETFMG Whiskey and Spirits ETF, which invests in whiskey-producing companies. The idea, according to Christian Svantesson, the fund’s founder and CEO, is that “instead of gold, we buy liquid gold.”
Given how steep the returns on rare whiskies have been over the past decade (roughly 25%), the Single Malt Fund’s 10 percent target rate of return sounds almost conservative. Data from Rare Whiskey 101 shows that the value of a collection of the world’s 100 most valuable single malt whiskies has gone up 447% since 2010 (though it’s unclear which bottles are included in said collection). Past performance, of course, is no guarantee of future results.
The rare whiskey market has been bustling worldwide thanks, in part, to the “traditional collectors, the professional investors and the curious connoisseurs,” Andy Simpson, a broker at Rare Whiskey 101, told CNBC last year. That confluence has created an “almost perfect bull market where demand consistently exceeds supply.” The numbers prove it, too. In 2016, auctions in the U.K. saw a 28.5 percent increase in the number of collector’s Scottish whiskies sold at auctions—to a total of 26,527 bottles.
Whiskey isn’t the first libation to become a part of an investment fund, either. The fine wine boom, beginning in the mid-1980s, spurred the development of wine investment funds. More and more investors started buying vintage wines as an alternative to bonds, stocks, and other boring, non-drinkable investments.
The Single Malt Fund will be listed on the Stockholm-based Nordic Growth Market in March, and, as Business Insider reports, investors can buy from the collection online as the funds become realized. That’s just enough time to save up enough to invest, and to finally learn how to correctly say “Bruichladdich” after a few sips.
*Correction: This post previously stated incorrectly that the fund can only be purchased by Swedes.
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