For centuries, if you wanted to invest in a quantity of wine smaller than a bottle, you had one way to do it: buy a glass or two. In the past few years, though, many interesting new options emerged. 

Welcome to the world of fractional wine and spirits investing. It's part of one of the most profound personal finance trends within the last decade: the fractionalization and securitization of investment in assets where, formerly, few had the chance to place their money. For example: a modernist masterpiece, or a beloved local bakery. In the U.S., the JOBS Act of 2012 made it possible for the first time in decades for millions of individuals to invest relatively small amounts of money in companies and other entities with a full regulatory overlay. 

That trend has trickled down to the world of wine and spirits. From the individual investor’s perspective, the process is remarkably simple: for as little as a few thousand dollars, you can buy into a fund, registered with the Securities and Exchange Commission (SEC), that invests specifically in, say, 2019 Mouton Rothschild. The company managing this investment holds the wine for an undetermined period and, if everything goes well, eventually sells it for a profit, of which you get your proportional share. 

A few companies now provide wine and spirit investing platforms (though not all of them offer fractional investments). The market leader appears to be Vinovest, which launched in 2019 and claims that it is “democratizing fine wine investing, providing clients with unparalleled access, liquidity, and transparency.” The company says it has invested in more than 650,000 bottles of wine and spirits for more than 150,000 clients around the globe. 

One key competitor is Vint, which launched around the same time. Adam Lapierre, a Master of Wine and Vint’s chief operating officer, formerly ran the wine purchasing platform Vinfolio. He says that, historically, an individual wanting to treat wine as a serious investment would need to allocate “at least $50,000,” partly because maximizing resale value necessitates buying—and keeping—the wine in its original, full cases. By contrast, a Vint investor can start with as little as $2,500; Vinovest as little as $1000. (Vint offers fractional investing opportunities; Vinovest does not.)

That doesn’t represent the entire cost. Vinovest’s website indicates that it charges an annual management fee to cover “insurance, storage, authentication, and active management of your portfolio.” The fee ranges from 1.9% of the value of your investment to 2.5%; the more you invest, the lower the percentage. 

Vint has created dozens of funds, each registered with the SEC and carrying its own investment thesis. For example, an early Vint fund required a $10,000 minimum investment in a portfolio of 70% finer wine (mostly Bordeaux, Burgundy, and Champagne) and 30% spirits (mostly Scotch and Japanese whiskies). It aimed for a 1-3 year holding period. The bottles are purchased from a variety of global providers. More niche funds exist, too: White Burgundy Collection (12 different wines, including 24 bottles of Pierre-Yves Colin-Morey “Genevrières” Meursault Premier Cru); Super Tuscan Collection (which is heavy on 2015 and 2016 Sassicaia); one dedicated to the 2017-2019 vintages of Screaming Eagle; and dozens more. 

Lapierre says that Vint aims to maximize its returns, but it isn’t necessarily looking to outsmart the market. Vint pays close attention to trading activity on the Liv-ex exchange. “You might see that 40% of the trading by value is in Bordeaux, 30% in Burgundy, and so on,” he observes. “That's typically the approach that we make. We want to be focused on the tried and true regions and brands with the highest level of liquidity and consumer demand.” 

There are a few important catches. To participate on these sites you must be an “accredited investor,” which means an annual income of more than $200,000 ($300,000 for a household) for two years, or a net worth of more than $1 million, not including the value of a primary residence. 

And, of course, you might lose money. Not surprisingly, the people trying to get you to invest in fine wine will tell you that wine is a great place to park your cash. Vinovest’s web site says that an unspecified “wine” portfolio appreciated by 304.4% over 15 years, while the Global Equity Index increased by 196.7%. (Vinovest did not respond to an interview request.)

Such claims warrant at least a little skepticism. For starters, none of these 21st century wine platforms have been around long enough to have a consistent track record. The holding period for these investments is measured in years, meaning that there have been very few exits thus far, and that’s also too short a period to know whether these companies’ specific portfolios will ultimately match the performance of the indices they cite. As with any investment, market timing and sentiment can overtake even a smart-sounding strategy; just ask someone who bought Bordeaux en primeur in 2009 or 2010. 

The much bigger question concerns whether these funds are looking in the right places for investment upside. Some of the most stratospheric price increases in recent years have come from smaller and highly-coveted new-school producers, many of whom do not hail from regions historically associated with very pricey wines: Loire Valley Chenin producer Stéphane Bernaudeau, or Spain’s new-wave old-vine whisperers Comando G. Or microproducers in Burgundy like Les Horées—finding an entire case of such wine is a laughably impossible task.

Along these lines, Matthew O’Connell, the CEO of online wine trading platform LiveTrade, told the Financial Times late last year that secondary-market pricing pricing for the big names of Champagne—such as Krug and Dom Pérignon—were down in the high single digits last year. Decanter reported that Liv-ex’s Champagne index was down 17.2% in the first 11 months of 2023, the corresponding Burgundy index posted nearly equivalent declines, and the Rhône 100 index was down more than 20%. Meanwhile, O’Connell also told the Financial Times that pricing for the new breed of grower Champagnes—he cited Ulysses Collin, Cédric Bouchard, Egly-Ouriet, and the category-establushing Selosse—were up between 10% and 20%. Are these new funds set up to capture such gains from those kinds of producers? 

It’s reasonable to wonder if the price tremors for top-tier established names indicate that pricing of such wines has peaked. One can argue that demand for the world’s finest wines remains ultra-hot, and looks to continue. One can also point to other major trends—slackening of interest in the China market and lower rates of alcohol consumption among those hitting legal drinking age—to argue the opposite.
 
Still, Lapierre points to instances in which Vint has posted solid returns, including a 27.83% return on a cask of Bowmore single malt, and a 39.06% return on a collection of Napa Valley wines from the 2018 vintage. And Vinovest does allow the sale of any investment bottle at any time, meaning that you can at least drown your sorrows over any lost cash—although if you sell before the suggested maturity date, you’ll incur additional fees.

But if either drowning your sorrows or celebration is your primary aim, well, you’re probably buying bottles to drink and enjoy, and not because you seek to store value.