News - Emerging markets
Categories: Emerging Markets | Economics / Markets
Topics: Emerging markets | Quantitative-easing | First state investments
First State's Jonathan Asante considered investing his own money in wine over fears bubbles are forming in more traditional asset classes.
The lead manager of the £1.2bn Global Emerging Market Leaders and £675m Global Emerging Markets funds is concerned further quantitative easing by the US Federal Reserve will exacerbate already high asset prices.
However, he decided against the investment when he saw prices had already risen significantly this year.
"The trouble with QE is it causes all sorts of bubbles, we have already seen this in GEM and other asset classes," he says.
"I was looking at investing in wine as a way to avoid the problem connected with excess capital, but I must have been the 1000th person to look at the asset class as the Fine Wine index has shot up already this year."
However, the manager, who has gold holdings in his funds to protect against inflation, decided the precious metal remains a better investment.
"I have decided to stick with gold as unlike wine there is limited supply," he says.
Categories: Emerging Markets | Economics / Markets
Topics: Emerging markets | Quantitative-easing | First state investments
Comments
Limited Supply
As an asset class, fine wine offers investors long term stable returns because the market is built on demand/supply imbalance.
The top wines are produced in fixed, small quantities and in contrast to gold, over time this supply can only reduce through consumption.
In essence fine wine has a perfectly inverse supply curve.
www.wineinvestment.org
Posted by: Tom Gearing
28 Sep 2011 | 11:29
The big question
Updating your subscription status 
IW Fund Centre
Run in conjunction with Funds Library, the IW Fund Centre combines qualitative and quantitative data on a huge range of funds.
Have your say
This week: What will happen to the eurozone if Greece leaves?
Job of the week
Events
12 Jun 2012 - 12 Jun 2012
The Cumberland Great Cumberland Place, London W1H 7DL
05 Jul 2012 - 05 Jul 2012
Royal Albert Hall, London Kensington Gore London, Greater London SW7 2AP
Comment on : Asante considers investing in wine as QE2 raises bubble fears
Well, investing in wine should be profitable as prices have risen significantly as earlier mentioned, also given that supplies are very much limited. this should give an upper hand to investors who are involved in this sector, though I think it is important to know which ones to invest in. Here, have a look at this
http://www.wineinvestmentadvice.com/premium_liquid_assets_promo/
Posted by: Adam Adamson
16 Nov 2010 | 03:48
Complain about this comment