A wine fund scheme started in Bermuda has become a truly global business with its vintages being sought from the US to as far afield as China, while being able to offer double digit returns to its investors consistently on an annual basis.The Wine Investment Fund (WIF), which was launched in 2003, produced an annualised return of 14.8 percent, outperforming the Liv-ex (London International Vintners Exchange) 100 which offered a growth rate of 14.56 percent.Currently the fund has approximately $80 million assets under management in an industry with a market capitalisation of $10 billion.The mutual fund, which is Bermuda based and administered on the Island, is run by directors Rodney Birrell, Sharon Beesley, cofounder of The ISIS Group, and Fabian Schonenberg, president of Tromino Financial Services Ltd, and its aim was to provide an absolute return to its investors.It is the oldest and largest absolute return fund which offers five-year investment cycles, four of which it has already paid out on, with two payouts per year in the Spring and Autumn.The fund has a large component of Bermuda-based investors including Bermudians and expatriates from politicians and re/insurance executives, while 70 percent of its subscribers are multiple investors and 80 percent of those invested have either reinvested their total payout or their initial sum.“For the first two or three years it was essentially Bermudian friends and family that invested a lot,” said Mr Birrell.“Now we have a five-year track record and have reached minimum assets under management of £50 million, or $80 million - two prerequisites for being considered an established fund.”Mr Birrell’s confidence in wine as an investment has been borne out by the fact that while gold increased four-fold in value since 1993, wine had risen 16-fold over the same period.And what makes his fund even more attractive is that it only invests in the top wines from Bordeaux in the south of France and it has been proven to offer the largest return with the least volatility compared to other investments such as stocks and oil.“There is no question that wine is marginally to neutrally correlated to the stock market,” he said.“In 2008 (following the financial collapse) we recouped five percent within three to four months compared to the stocks market which fell 30 to 40 percent and are still recovering.”Unlike wine clubs which invest for the love of the product, WIF has a specific investment philosophy called the price step theory which sees wine increase in value over time and because it is a tangible asset, Mr Birrell believes it will always be worth something.Held in UK government bonded warehouse means that there is no UK duty or value added tax (VAT) to pay on the wine, and it doesn’t cost much to insure.The other beauty of being such a select product, said Mr Birrell, was that as supply decreases demand increases and the value of the wine goes up as it becomes older and rarer.“Demand has been going up from the Chinese and American markets,” he said.“This is a truly global market now and a very broad-based investment climate.”At any one time WIF reviews 35 chateauxs focusing on 10 vintages in each meaning that it monitors 350 wines on a daily basis, according to Mr Birrell.“I can’t think of another asset that has all the attributes of wine as an investment,” he said.“We only buy wines that are four years old meaning that there are no problems with tampering, we only buy original wooden cases and take photos of the bottles and cases and we only buy the standard size 750ml or magnum bottles meaning there is no issue with fakes.“Also it has been shown that two glasses of wine a day are beneficial to your health or therapeutic and wine has always stood the test of time as well as our wines being theft insured.”Mr Birrell, who was giving presentations to investors at LOM and the Royal Hamilton Amateur Dinghy Club this week, estimates that the next tranche of investment from 2006 which is due to come to maturity soon will offer a return of approximately 13 percent with future tranches on target for double digit returns.“I believe that the fine wine market will continue to grow and perhaps the investment pyramid will expand over time,” he said.“I don’t think there’s going to be a China bubble and their economy is growing at the moment, as are the numbers of buyers there because wine has become a status symbol that you have to have.”He said another key selling point is that the fund is easy to understand unlike many complicated investments which even their managers did not comprehend.Investors can also look forward to raising a glass at WIF’s annual dinner held at the Oxford and Cambridge Club in London in June.The next tranche of investment is available to subscribers until the end of this month. The minimum investment is £10,000.For more information at the Wine Investment Fund visit the website at www.wineinvestmentfund.com