Investing in whisky with WhiskyInvestDirect: worked examples
The illustrations below show commission and storage fees that will be charged when purchasing and storing maturing whisky. There are also examples of how three actual accounts have performed since October 2015 when all available whiskies at the time were purchased.
Mr Smith funds his WhiskyInvestDirect account with £10,000 and buys one line of stock.
|Purchase of 3,300 LPA of Glen Spey 2014 Q4 @ £2.75/LPA||£9,075|
|Storage fees: first year (annually equivalent to £0.15 per LPA)||£495||5.45%|
|Cash remaining (after first year's storage fees)||£271|
Note: commission will also be charged when the whisky is sold.
In this example, Mr Smith did not purchase whisky to the full £10,000 in his account, but decided to leave sufficient cash in the account to pay the monthly storage charge for a full year. At the end of the first twelve month period, if he made no more trades, he would still have a cash balance of £271 which would be enough to pay the ongoing storage charge for a further six months.
Ms Jones opened a WhiskyInvestDirect account with £1,000 and purchased three whiskies.
|Purchase of 200 LPA of North British 2014 Q4 @ £1.25/LPA||£250|
|Purchase of 100 LPA of Auchroisk 2013 Q3 @ £3.35/LPA||£335|
|Purchase of 100 LPA of Inchgower 2012 Q4 @ £3.75/LPA||£375|
|Storage fees: per month (equivalent to £0.15 per LPA annually)||£5|
The monthly storage fee is slightly above the minimum monthly charge of £3. Ms Jones has sufficient cash to pay for four months of storage after which she will need to deposit more cash into her account to cover the ongoing storage costs.
For this scenario the annual storage charge is 6.25% of the purchase value of the whisky.
Points to note
The storage charge in the first example is a lower percentage of total value because only malt whisky was bought. Grain whisky is lower cost to purchase than malt of a similar age but the storage charge is the same for every Litre of Pure Alcohol (LPA).
Please note that we charge a minimum monthly storage fee of £3. If you purchase less than 240 LPA of whisky you will be charged this minimum fee.
Storage charges are deducted monthly from your WhiskyInvestDirect account. If there is not sufficient cash in the account we will contact you with reminders. Should you chose not to fund the account to pay for ongoing storage we reserve the right to sell enough whisky to cover the storage costs.
We do not recommend one whisky over another and we can’t tell whether malt or grain will be a better investment. We can draw attention to the fact that total production of grain to malt is roughly 60% to 40%, and 90% of all Scotch whisky sales are in blended whisky, a blend of both grain and malt whisky.