Fine wine has several compelling advantages for investors looking to diversify and potentially enhance their portfolios’ returns. And platforms like Vinovest have made it easier than ever for everyday investors to include wine as an asset in their portfolios.
But transaction fees can add up, and management costs can be relatively high compared to other actively managed assets. And investors who withdraw their funds within three years of their initial purchase will get hit with a 3% penalty.
If you’re an everyday investor looking for a simple way to gain direct exposure to investment-grade wine — whether to diversify your portfolio or for its attractive historical returns — don’t overlook Vinovest. It’s changing the game, helping to make the once-exclusive world of fine wine investing accessible to a wider group of investors. It offers:
With the choice between a no-minimum trading account that lets you trade bottles of wine-like stocks or a professionally managed account with a buy-in as low as $1,000, investors have multiple options for building fully insured fine wine portfolios.
Now, a few caveats: Vinovest’s starter managed account comes with a 2.85% annual management fee, and transaction fees in its trading account will surely eat into profits. Vinovest is also relatively new, which means we don’t yet know the company’s long-term viability or portfolio performance.
In all, Vinovest has a lot going for it and is a worthy option for everyday investors looking to expand into the world of fine wine investing. You only have to be aware of the costs.
Vinovest acts as both a portfolio manager and an exchange, allowing you to trade wines like stocks or have a personalized portfolio of wines built and managed on your behalf. You can choose between a trading account or a managed account — or open both.
In either case, you own 100% of your wine and it’s fully insured. Vinovest also stores it on your behalf in bonded storage facilities in France, Denmark, Singapore, Hong Kong, the UK and the US.
Bonded warehouses allow Vinovest to store your wine without payment of value-added taxes (VAT) and excise duty taxes. This means you can buy and sell bottles more cost-effectively than if you were to store your wines at home. The only time these taxes apply is if you take delivery of your wine, which you can do at any time.
You deposit the funds, and Vinovest handles all the aspects of building and managing your portfolio, including sourcing, purchasing and storing your wine. Like other automated investment platforms, Vinovest builds personalized portfolios based on your responses to questions about your investment goals, risk tolerance and time horizon.
After you’ve completed the short questionnaire, Vinovest takes about two to three weeks to construct your portfolio. The company sources the most competitively priced wines it believes will provide maximum returns.
Vinovest’s trading platform was launched in February 2022 and is still in beta testing. But it allows you to buy or sell individual bottles of investment-grade wine much like you would trade stocks in a brokerage account. With a Vinovest Trading account, you choose the wines yourself and have complete control over your listing price and when to buy and sell bottles.
There are no account minimums or minimum hold times with a Vinovest trading account.
Investors who use Vinovest own 100% of the wine in their portfolio and can buy or sell — or take delivery of — their wine whenever they like. Vinovest says it can sell your wine in two to three weeks, should you choose to liquidate any of your holdings.
While you have the freedom to do what you want with your wine, having a long-term investment horizon will likely serve you best. Vinovest recommends investors hold their wine for at least 5 to 10 years so quality and scarcity can both play their roles in driving your wine’s value higher. For most investment-grade wine, the 10- to 15-year mark is the sweet spot.
Key takeaways to maximize your returns
As far as potential returns, Vinovest publishes a quarterly report on its website detailing its portfolios’ performance. According to Vinovest, the average return on investment for wines in Vinovest portfolios in the first quarter of 2022 was 5.59%. If this pace continues, it would represent a 22.36% annual return.
In comparison, the Dow Jones Industrial Average (DJIA) returned -5.21% in the first quarter, according to Yahoo Finance data. Meanwhile, the Nasdaq Composite and S&P 500 returned -10.18% and -5.55%, respectively.
Here’s a look at how Vinovest performed compared to the major stock market indexes in the first quarter of 2022, as well as in 2021 and 2020.
| Q1 2022 | 2021 | 2020 | |
|---|---|---|---|
| Vinovest | 5.59% (average return) | 19.3% (average return) | 17.83% (median return) |
| DJIA* | -5.21% | 20.23% | 6.02% |
| Nasdaq* | -10.18% | 23.2% | 41.75% |
| S&P 500* | -5.55% | 28.79% | 15.29% |
*Data according to Yahoo Finance
Over the last two years, we can see that Vinovest portfolios, on average, have provided competitive returns to those of the major stock indexes.
But investors need to keep in mind that Vinovest’s published returns are the average of its portfolios, and returns can vary depending on the exact makeup of their portfolios. Vinovest is also a few years young, which means we don’t yet know the long-term performance of its portfolios.
Signing up with Vinovest is simple and takes only minutes. The account setup process includes one form for your name, email, phone number and password. If you want to open a managed account, complete your investor profile and fund your account. Otherwise, you can start trading immediately upon funding your account.
In all, Vinovest’s platform is uncluttered and easy to navigate. It offers a clean, elegant design that’s familiar and user-friendly. For those who want to trade wines individually, each listing on its exchange is accompanied by a chart of its performance, Vinovest’s rationale behind the investment and scores from wine critics.
Vinovest’s pricing and fees vary between its managed account and trading account.
Vinovest offers four investment tiers for its Managed accounts: Starter, Plus, Premium and Grand Cru. With the Starter plan, investors can access Vinovest’s fully insured, algorithmically selected portfolios with a minimum investment of $1,000. The invested capital in your account is subject to a 2.85% annual asset management fee, which covers active management of your portfolio, authentication, insurance and storage.
While a $1,000 minimum to get started is no drop in the bucket, we don’t think it’s an outrageous amount either. First, it’s on the low end compared to the competition. And if you look at other alternative investing platforms, such as real estate, the $500 to $1,000 minimum is commonplace. Plus, with Vinovest, you own 100% of the wine in your portfolio. Meaning, if you want to, you can have the wine shipped directly to your house to drink.
Here’s more about Vinovest’s managed account levels:
| Account level | Minimum initial investment | Annual management fee | Features |
|---|---|---|---|
| Starter | $1,000 | 2.85% |
|
| Plus | $10,000 | 2.70% |
|
| Premium | $50,000 | 2.50% |
|
| Grand Cru | $250,000 | 2.25% |
|
Aside from annual management fees, the other notable fee investors need to be aware of is the early liquidation penalty. Vinovest charges a 3% early liquidation penalty if you withdraw your funds within three years of the initial wine purchase — another reason you should be prepared to hold your investment for the long term.
In all, Vinovest’s managed pricing and fees are right around that of other similar platforms. For instance, Sommtrust, a similar platform that helps you build curated portfolios of investment-grade wines, charges a 2.70% annual fee for its basic plan and also requires a minimum investment of $1,000. Meanwhile, Cult Wines requires a $10,000 minimum investment for its basic plan, which comes with a 2.95% annual management fee.
Unlike with its managed portfolios, there are no dollar minimums with a Vinovest trading account.
Here are how trading account fees break down:
Vinovest’s trading account fees are relatively high compared to brokerage accounts that let you trade stocks, especially nowadays when commission-free trading is the new norm. If you’re actively trading bottles of wine, these fees will undoubtedly eat into your profits.
Investors should consider the following pros and cons before investing with Vinovest:
Yes, Vinovest is a legitimate company and not a scam. The company was founded in 2019, according to Crunchbase data, and is headquartered in Los Angeles, California. It’s also been accredited by the Better Business Bureau (BBB) since 2020.
Customer sentiment overall is positive. As of May 2022, Vinovest has 4.3 out of a 5-star rating on Trustpilot based on over 100 customer reviews.
Satisfied customers highlight the company’s knowledgeable advisers, simple account setup process and sleek, user-friendly interface. Dissatisfied customers complain of poor short-term returns and a lack of platform features.
The company has fewer reviews on the Apple App and Google Play stores, but they’re largely positive nonetheless. Vinovest has a 3.7 out of 5-star rating on Google Play based on 17 reviews and a 4.5 rating on the Apple App store based on 45 reviews.
Vinovest is also accredited with the Better Business Bureau with an A- rating. It has one complaint closed in the last three years and no reviews.
Contact Vinovest customer support in three ways:
Wine investing platforms are relatively new. That said, there are a few options out there for investors to choose from if Vinovest doesn’t feel right.
If you want an even lower barrier to entry into wine investing. Securitized fine wine investing is likely your best bet. For instance, Vint allows investors to buy and sell SEC-securitized shares of wine for as low as $25 apiece, but you don’t actually own the wine.
If you want a professionally managed wine portfolio with lower ongoing costs. Consider Sommtrust. It offers a similar investment experience to Vinovest and an identical $1,000 minimum investment but with a 2.70% annual management fee.
If you want a hands-off investment portfolio. Consider a robo-advisor. Some robo-advisors, like Hedonova, offer exposure to wine and alternative asset classes. Others, like Betterment and SoFi, focus on traditional investments like stocks, ETFs and bonds. Compare robo-advisors using our table, and select Go to site to learn more about a platform.
Information on this page is for educational purposes only. Finder is not an advisor or brokerage service, and we don't recommend investors to trade specific stocks or other investments.
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