There’s no doubt that 2020 represented a unique year for commodity investors, with the COVID-19 pandemic causing a global market sell-off.
The Knight Frank Wealth Report 2021 shows how whisky has performed as part of these luxury assets over a 12-month period, while also taking into account other factors such as currency fluctuations and political instability.
Looking specifically at the KFWI, we can see that there was an overall increase in value from January 2020 to January 2021 actually dropped by 3.5%. This is compared to an increase of 13% for wine (based on the Liv-ex 100 Index) and a 6% increase for classic cars (according to the HAGI Top Index).
While this might look like a slowdown in the market, it should be remembered that, in the past decade, the whisky market, as tracked by the KFLII, has increased in value by 586% and, as the wealth report points out, increased by 40% as recently as 2018.
By comparison, the markets that showed the greatest increase in value over the course of 2020, handbags, wine, and cars, have only increased by 108%, 127% and 193% respectively over the last decade.
This slight decline is also not representative of the whole of the market. As the report points out, “Most of the 100 single malts within the KFWI are ultra-rare luxury bottles and this part of the market saw more stress in 2020.”
The data from the Apex1000 Index shows an 8% increase in value for the top 1000 most valuable bottles over the course of 2020, with only the very top segment of the market showing more static prices and less demand.