(SINGAPORE) Investors here might be tempted to drink a toast to the profits to be made from fine wine - thus falling victim to what is said to be the biggest risk in this alternative asset class of wine investment: You cannot make money from wine you have already drunk.

Globally, fine wine investing is seeing a renaissance, and affluent Asians are very much part of this. SG Private Bank reports keen interest in its tailored offering 'The Ultimate Wine Fund' set up last year specifically for Asian clients. Recently BNP Paribas Private Bank also launched its advisory service.

	'People in this region, they want good wine... Unlike the market in England and Australia, S'poreans want the best.' - Mr Jeremy Kasler of Australian Wine Index

But it's not just the very well-heeled who can get exposure. With $10,000, Australian Wine Index can start you off with wine that is expected to rise in value. And if your preference is for 'blue chip' wines from the Bordeaux region of France, Equity Wine Investments is also looking for a share of your wallet.

'We're quite happy with the response and the returns,' says SG Private Bank's chief executive Pierre Baer. 'Some clients may want to build their own cellar, or a client may have some knowledge and wants access to wines at a special price compared to buying from a merchant.

'Generally prices have increased and demand is continuing. The 2000 and 2003 wines are described as the vintage of the century. But 2005 is expected to be the absolute historical vintage.' SG looks mainly at premium wine from Bordeaux, the most 'liquid' and established market. To invest through SG, which taps wine specialist Ficofi, you'll need to fork out US$300,000 for a start. But this investment can be pooled between friends.

Investing in wine has been a niche market, even in Europe and the US. But interest has soared lately, thanks to Asia's rising affluence - and the Internet, which has given rise to electronic wine exchanges. The London International Vintners Exchange 100 Fine Wine Benchmark, or Liv-Ex 100, is said to be the equivalent of the FTSE 100 stock market index, tracking the prices of 100 acclaimed wines. In the current year up to end-November, the index has risen 45.7 per cent, compared to about 16 per cent for the S&P 500, assuming dividends reinvested. Bordeaux wines have a current weighting in Liv-Ex 100 of 91 per cent.

The publication of the book Wine Investment for Portfolio Diversification by chartered accountant and investment professional Mahesh Kumar has lent legitimacy. Wine values, the book argues, are not correlated to traditional asset classes, so they can enhance a portfolio's returns while lowering the risk.

Mr Kumar has constructed a Fine Wine 50 Index, a portfolio of 50 investment-grade wines, which reportedly averaged a 12 per cent annual return between 1982 and 2003.

Jeremy Kasler of Australian Wine Index says the firm has some 1,200 customers who have invested a total of some $35 million. 'We have seen historically a 12 per cent return per annum, some more and some less, before costs . . . Most people have a newfound appreciation of wine. More and more people are drinking red wine. The thing about people in this region - if they are going to drink wine - they want good wine... Unlike the market in England and Australia where they generally drink cheaper wine. Singaporeans want the best.' While some may turn up their noses at Australian wine as an investment, Mr Kasler maintains that wines from Down Under are more affordable and price appreciation can be dramatic as well if one gets access to the best vineyards. For example, the firm sold the Mollydooker Carnival of Love in magnum format for $125 a bottle some nine months ago. Today the wine could sell for about $300 for a profit of around 150 per cent.

Joel Lam, managing director of Equity Wine Investments, says: 'Our company was formed to reach out to the average income earner. If you have $15,000 to $20,000 you can invest. Wine investing used to be a very exclusive thing.' There are fees of course, including charges for storage and insurance, and an exit fee if the advisory firm undertakes to sell the wine on your behalf. There are risks in addition to the danger of drinking your profits before you make them. Expectations of a wine's value typically hang on critics' opinion, the most famous of whom is Robert Parker. A high, or low, Parker rating can send prices soaring, or sinking.

It is also the top wines that rise in price the most - Bordeaux 2005 has set new records for release prices. You may be disappointed if you have put your money into mid-range wines.