While most of the world’s major markets have been steadily declining over the past year, there has been one investment which has stood the test of these recessionary times.Since 1993 the value of wine has increased 16-fold, easily surpassing its nearest rival gold, which grew five-fold during the same period.The Wine Investment Fund (WIF), which was launched in 2003 and is run by directors Rodney Birrell, Sharon Beesley, co-founder of The ISIS Group, and Fabian Schonenberg, president of Tromino Financial Services Ltd, is up by approximately two to three percent over the past six months compared to the stock market which is down 10 to 15 percent and gold which has slipped 25 percent from its high of 19.54 three to four weeks ago.And the Bermuda incorporated mutual fund, which aims to provide an absolute return to its investors, has grown its assets under management to between $80 million and $85 million in the space of eight-and-a-half years with the potential to increase to $100 million by the end of this year.Of the five payouts made from the fund so far the return on investment has been 14.5 percent net of expenses and fees and with a lower volatility than the oil, stock and gold markets and even the Liv-ex (London International Vintners Exchange) 100 it represents a low risk-high return.According to Mr Birrell 80 percent of subscribers are multiple investors and more than 85 percent of those who have received a payout have reinvested their original outlay and most have put in the full amount including the return.“The great thing about the fund is that everybody understands it and there is nothing complicated about it,” he said.“In effect we raise the money, buy the wine, hold the wine, sell the wine and distribute the profits.“Because wine is a tangible asset it will always have an intrinsic value and it is up to the market to determine that.”The fund’s investment strategy, which subscribes to the price step theory, is to invest in and hold physical stocks of limited production, superior quality wines of very good to outstanding vintages from the Bordeaux wine region of France, with diversification being achieved through putting the money into a selection of producers and vintages and a proprietary model being employed to select wines considered to be most likely to increase in price over the five-year investment term.The wines are held in secure, professional wine storage facilities in UK government bonded warehouses and are insured at market value.Mr Birrell, who was in Bermuda this week speaking to investors and will be presenting the WIF at a wine-tasting event sponsored by LOM held at Gosling’s tomorrow, said that the second tranche of the fund had raised the most money to date largely due to investors holding back on their stocks.Meanwhile, he said that the fund had proven its value in outperforming the Liv-ex on several occasions despite having a number of costs to meet such as rents, salaries, transportation and storage.And there are some positive signs for the future with the market starting to pick up substantially following a slow August and September with the Americans who had been out for several years now re-entering the marketplace.Mr Birrell said that Bermuda was still a very active market representing 20 percent of the total fund, while it has also been expanding into Panama and Switzerland as well as its staples of the UK, the US, Canada, Hong Kong and China with plans mooted to move into India. In fact new subscribers make up 10 percent of all investors.“The Bermuda investors have been extremely positive and very loyal,” he said.“There seems to be quite a buzz around the place at the moment about the fund. HSBC and Butterfield Bank have also expressed an interest on behalf of their private banking clients.“One Bermudian investor remarked to me that the Wine Investment Fund was the only fund that he is actively invested in that is still above water this year.“Overall our investor profile has changed originally it was much more European, Bermudian and North American centric, but now we are adding a lot more investors from South America.”Dismissing the notion that the current recession was worldwide, Mr Birrell said that despite the European and American markets being depressed at the moment, the likes of India, China and Australia were still faring well.“People still have money, they just don’t know what to do with it,” he said.“They don’t want to invest in the stock market because of the volatility and don’t want to go into real estate due to the slump across North America so they are looking to alternative assets such as gold, antiques and wine.”The latest tranche of the fund is open until October 31. The minimum investment is £10,000 with a subscription fee of five percent, management fee of 1.5 percent and performance fee of 20 percent.For more information on the Wine Investment Fund visit the website at www.wineinvestmentfund.com and to book your place at the WIF presentation and wine tasting contact LOM at 292-5000 or email michael.greaves[AT]lom.com