Deutsche Investment CEO
Shin Yong |
By Park Hyong-ki
Staff Reporter
More wine? How about a fund with that?
Most Koreans will probably be bewildered by such an offer. They may have swirled it, smelled it, then tasted it. But they may not have invested in wine through funds, given that such alternative investment products are almost non-existent in the country.
Do not fear, says Deutsche Investment Trust Management Korea, assuring that its wine fund will be the safest bet for a long-term investment with lucrative yields compared with investing in highly volatile stocks and bonds.
Introducing the ``Deutsche DWS Wine Growth Real Asset Fund'' for the first time in Korea, the company said the public fund practically invests in every aspect of wine from production, storage to distribution and retailing, which will all be insured. Specifically, investments will be made in premium wines produced at France's Bordeaux, Bourgogne and Rhone Valley regions. After production, the company stores them in Switzerland where it exempts capital gains tax on wine transactions.
With demand for wine soaring worldwide, the asset management company said the fund offers a profitable opportunity to retail investors in Korea.
``Wine is a very attractive asset. The industry has been flourishing, immutable to external economic factors ― whether negative or positive,'' Shin Yong, CEO of Deutsche Investment, told a press conference.
Even though a sluggish consumption on economic woes may have affected the industry a little over the years, empirical data shows that the wine market has never experienced a deep slump, but has seen the value of wines continuously appreciate, he said.
Shin said the benchmark London International Vintage 100 Index (Liv-Ex 100) run by the London International Vintage Exchange for wine traders and merchants has consistently performed better than other global indices such as the MSCI World Index, the Goldman Sachs Commodity Index and the Lehman Brothers Global Bond Index.
For instance, the Liv-Ex 100 posted returns of 279.9 percent as of the end of March this year, compared to the MSCI World Index's 119.5 percent.
The attractiveness of investing in wine also lies with the market being a lot less volatile than other traditional assets such as equities and fixed income securities.
``It has been less volatile than other investment markets,'' said Daniel Lim, vice president of Deutsche Investment's marketing and sales, citing the volatility rate of the Liv-Ex 100 at 0.118 percent on average between 2001 and 2008, compared to the MSCI World's 0.132 percent.
Wine funds had only been introduced as an alternative product investing in equities related to wine and liquor businesses or as a private fund for institutional investors.
Deutsche Investment's wine fund was previously introduced as a private fund in Singapore.
Investors will need to invest at least 10 million won in the Wine Growth Real Asset Fund for 3.5 years, to be marketed at Kookmin Bank, Hana Bank, Korea Exchange Bank, Pusan Bank and Samsung Securities until the end of this month.
The fund will be managed by the Deutsche Bank Group's DWS Investments in Singapore, utilizing the expertise of FICOFI, a Paris-based wine investment consultant.
phk@koreatimes.co.kr
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