Vinovest Review 2022: How to Get Started In Wine Investing
Breadth of Products
Reviewing Vinovest’s strengths and weaknesses is a good way to get a feel for the platform.
- Low minimum investment
- Proprietary algorithms designed to maximize returns
- Master Sommeliers advise on the best wines to choose
- Buying power that helps lower prices for individual bottles
- Management fees charged for storage
- 3% early liquidation penalty assessed for withdrawing funds within three years of the initial purchase
- Can take a long time to see a return
What Is Vinovest?
Vinovest is a Los Angeles-based wine investment platform that builds portfolios of different bottles for investors for as little as $1,000. The portfolios are based on the input of the company’s Master Sommeliers, along with quantitative investment models that analyze thousands of data points. Vinovest uses its global network of connections to buy fine wines on behalf of investors with the goal of getting the most competitive prices available. Portfolios are typically completed within two to three weeks. Investors own all the wines in their portfolios and can buy and sell bottles whenever they like. Vinovest also authenticates, insures and stores the wine.
Who Is It Best For?
An obvious priority is that investors have an interest in wine – and a certain amount of experience with it. You don’t have to be an expert to invest with Vinovest, but you should have a working knowledge of different wines and regions, as well as familiarity of how wine markets work. Vinovest works best for wine enthusiasts who take a long-term view. The typical holding period for wines is five to 10 years to ensure the best return on investment.
How to Apply to Vinovest
Vinovest makes it easy to sign up for an account. Just go to their website and hit the “Get Started” link on the home page. You can sign up with Google, Apple or your email. After that, you’ll complete a one-minute questionnaire that helps Vinovest build a personalized portfolio that matches your investing goals. The company has four different investment tiers, starting as low as $1,000.
The buying process at Vinovest takes two to three weeks. Once an investor’s first deposit lands in their Vinovest account, the platform’s algorithm begins looking for fine wine that fits their investment criteria. Vinovest tries to purchase wine below the retail price to maximize returns. The company then authenticates, ships, and stores the bottles at the nearest bonded warehouse.
The algorithm itself is based on an investor’s risk tolerance and is broken down into three different levels:
- Aggressive is designed to achieve the highest returns
- Moderate aims to achieve the highest Sharpe ratio, which means the highest return with the lowest possible volatility
- Conservative is optimized for the lowest annualized volatility
For example, if you select a portfolio with an aggressive risk tolerance, the algorithm will choose more wines from emerging markets than it would for moderate or conservative portfolios. That’s because these wines have higher potential but also carry higher risk. A conservative portfolio would feature blue-chip wines from well-established regions that have extensive track records of price appreciation.
Vinovest offers these four different investment plans for clients:
- Standard Tier: $1,000 to $9,999 investment
- Plus Tier: $10,000 to $49,999
- Premium Tier: $50,000 to $249,999
- Grand Cru Tier: $250,000 and higher
How Vinovest Earned its Scores
Here’s a breakdown of the different factors that comprised GOBankingRates’ scoring.
Vinovest’s mission is to “democratize” fine wine investing by giving investors greater access, liquidity and transparency than they would find elsewhere. The platform is available to all kinds of investors, from those without a huge pile of money to wealthy folks with hundreds of thousands to invest. The process of signing up and funding an account is simple and straightforward.
This might be Vinovest’s biggest strength – a very low minimum investment of $1,000.
Vinovest is not the place to go if you want a fee-free investment experience. Because proper storage is a critical element with wine, the company charges a storage management fee that varies based on your investment tier. The fee covers insurance, storage, authentication, and active management of your portfolio. Fees are prorated across the year and only charged on the invested capital in your account. The current fee structure is as follows:
- Standard Tier: 2.85%
- Plus Tier: 2.75%
- Premier Tier: 2.5%
- Grand Cru Tier: 2.25%
You also face a 3% early liquidation penalty for withdrawing funds within three years of the initial purchase
Breadth of Products
Because you are investing in one product – wine – Vinovest doesn’t offer nearly as much diversity as traditional investment firms that can spread your money among stocks, bonds, funds and other vehicles. But within the wine investment niche, you do have access to many different types and regions based on your investment profile.
Good To Know
According to Vinovest, only 1% of the wine sold at grocery stores is investment-grade because most wines don’t have a built-to-age structure. Vinovest uses a team of sommeliers to evaluate wine and determine which ones tend to gain value over time. The platform also uses a proprietary algorithm to determine a wine’s investment potential based on several factors, including critic scores, age, liquidity, risk-to-return ratio, secondary market pricing, and the producer’s brand equity.
Vinovest vs. Competitors
Online wine investing occupies a very small corner of the overall investment landscape, but there are a few players out there. Here’s a look at how Vinovest compares with a couple of them.
|Vinovest||Investors who want to buy individual bottles of fine wine based on expert input and proprietary data|
|Vint||SEC-qualified platform that lets investors buy shares in collections of various wines and spirits|
|All Wine Exchange||Blockchain-based platform that provides an open marketplace for retail clients, institutions, and brokers|
Vinovest vs. Vint
Vint lays claim to being the only platform qualified by the U.S. Securities and Exchange Commission to invest in wine and other spirits. It’s a good choice if you want to buy shares of collections. Vinovest is a better fit if you want to focus on fine wine only and own the bottles themselves.
Vinovest vs. Alti Wine Exchange
Hong Kong-based Alti Wine Exchange calls itself “the world’s first blockchain-based platform” that specializes in wine trading and investing. Like Vinovest, Alti offers direct access to rare wines, but with much more focus on retail clients, institutions and brokers. Vinovest works better for individual investors who want the input of wine experts.
Vinovest is an excellent choice for oenophiles or even casual wine enthusiasts who want an alternative investment vehicle that involves something they enjoy. As with any investment, there’s no guarantee you’ll earn a decent return on your money, or even any return. You’ll need to be patient for your investment to pay off, and you’ll have to pay management fees. But Vinovest’s wine experts and technology are huge assets in minimizing risk.
FAQHere are answers to some of the most frequently asked questions about Vinovest.
- Does Vinovest offer discounts?
- There are a couple of ways you can earn discounts. When you refer a friend you and your friend will get three months of fee-free investing. You can also opt for auto-invest to receive 5% off all management fees.
- Can I set up recurring deposits?
- Yes, you can automatically add funds to your account on a daily, weekly or monthly basis. The minimum deposit is $500. You can set up a recurring deposit via bank transfer or credit card.
Editorial Note: This content is not provided by Vinovest. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by Vinovest.