Rare Whisky Investment Update: 30th September 2020

Increased buoyancy in the Rare Whisky Market - September Closes out on Record High For Apex1000 Index

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We remain impressed by the continued positive momentum of the benchmark Rare-Whisky-Apex1000 Index (A1K) over the first three quarters of 2020. As at the 30th of September the A1K index has increased by 6.82%, almost double 2019’s 3.79% increase over the same timeframe, and just 0.35% short of level par with 2019’s full-year 7.17%. Adding a little balance, neither 2019 nor 2020 can compete with the record breaking 2018 as the chart below illustrates.

As we move into the final quarter of 2020, we transition into what is typically the most buoyant, high-yielding period of the year. Indeed, September in isolation showed a gain of 1.55% for the A1K, which, at its month-end close of 960.14 points, is a new record for the index.

When that performance is viewed alongside the significant year on year increase in the volume of bottles hitting the UK auction market, the remaining months of 2020 start to look positive.

Undoubtedly the number of bottles appearing at auction will increase through the final quarter of the year, but the absorptive effect of demand now seems to have returned with a vengeance. In the worst economic year, arguably in history, demand would not only appear to be the dominant force, it also appears to be accelerating.

In less positive news, earlier in the quarter, Poly Auctions in HK held an interesting auction of polarities. The vast majority of lots failed to sell but one bottle of forty-year-old Port Ellen went berserk and sold for the GBP equivalent of c£56,000. We were asked for comments on whether this was the ‘beginning of the end’ of the whisky investment/collectors market (especially in these troubled times) and what did we make of a seeming world record price for a bottle of Port Ellen?

Just as one swallow does not make a summer (so we should disregard the Port Ellen as a spike, not a true market value), one under-sold auction doesn’t signal the end of an entire market.

The broader market would appear to have steady and building momentum after a slow start for obvious and very challenging reasons… but this is a marathon, not a flipping (should that be ‘flippers’!!) sprint. In the current climate a 6.82% YTD increase demonstrates rare-and-collectible Scotch Whisky’s resilience as an investment and its negative correlation to traditional markets where bad-news and negative sentiment can drive a rapid sell-off.

The individual indices cement September as a strong month, with most indices showing growth.

We can all forgive Rosebank its September ‘wobble’ given its relatively short/medium term gains.

There remains vast uncertainty in every market. In our opinion that won’t change for years to come... but for now, the golden-sheen of rare Scotch (okay, okay! and Japanese…) whisky is being pushed by bulls rather than slashed by bears.

Slanite!