Venture Capital Trusts
Discussion
I'd have thought the trusts publish their dividend histories. e.g. http://www.provenvcts.co.uk/siteuploads/funds/Hist...
This makes apparent the problem with simply looking at dividend history with VCTs - the dividends tend to be highly variable, with the odd exceptionally good one (30-Nov-18 for example in that pdf), as they're typically driven by a particularly good disposal, which by their nature are hard to predict far in advance.
This makes apparent the problem with simply looking at dividend history with VCTs - the dividends tend to be highly variable, with the odd exceptionally good one (30-Nov-18 for example in that pdf), as they're typically driven by a particularly good disposal, which by their nature are hard to predict far in advance.
Edited by xeny on Friday 15th February 13:21
It's very hard to generalise. The TrustNet figures show huge variability between VCTs even over a 5-year timeframe https://www2.trustnet.com/venture-capital-trusts/p...
As xeny says, a typical trust may have a target dividend return but supplement it with special dividends in years when then have exceptional realisations. Looking at the Baronsmead figures (in which I'm invested) they've delivered two strong years recently (the dividends shown I believe relate to an initial 100p share price) http://www.baronsmeadvcts.co.uk/page/101/Dividend-... It's also notable that for a new trust the initial ~5 years will see thin dividends until successful investee companies take off.
I expect one of the IFAs on this board may give you a more considered analysis; possibly a tax adviser will be too focused on the tax concessions at the expense of the overall investment case.
For my sins, as an experiment, I put £40k into four VCTs at the tail end of the dotcom bubble, before tax relief (a decision largely driven by tax considerations). I haven't sold, or added to, any holdings and for the past 4 years or so they've delivered £2k-3k pa tax-free dividends. No doubt I could have done better by pro-actively managing these and researching the underlying companies (though that's very time-consuming). Possibly I would have done better overall with a conventional non-tax exempt fund. Possibly the VCT managers' investment process is better now than 18 years ago. But not an unqualified disaster overall. I expect there are 'serial VCT investors' here who can comment with greater authority!
As xeny says, a typical trust may have a target dividend return but supplement it with special dividends in years when then have exceptional realisations. Looking at the Baronsmead figures (in which I'm invested) they've delivered two strong years recently (the dividends shown I believe relate to an initial 100p share price) http://www.baronsmeadvcts.co.uk/page/101/Dividend-... It's also notable that for a new trust the initial ~5 years will see thin dividends until successful investee companies take off.
I expect one of the IFAs on this board may give you a more considered analysis; possibly a tax adviser will be too focused on the tax concessions at the expense of the overall investment case.
For my sins, as an experiment, I put £40k into four VCTs at the tail end of the dotcom bubble, before tax relief (a decision largely driven by tax considerations). I haven't sold, or added to, any holdings and for the past 4 years or so they've delivered £2k-3k pa tax-free dividends. No doubt I could have done better by pro-actively managing these and researching the underlying companies (though that's very time-consuming). Possibly I would have done better overall with a conventional non-tax exempt fund. Possibly the VCT managers' investment process is better now than 18 years ago. But not an unqualified disaster overall. I expect there are 'serial VCT investors' here who can comment with greater authority!
I’ve done three or four over the years and had mixed success.....none have been exceptional that’s for sure. One was pretty poor and that was an education....I think I invested in 2008 or 2007. During the Global Financial Crisis instead of managing the portfolio/looking for opportunities they basicallly buried their heads in the sand and did nothing.
The lesson I learnt from that is that if you have the skill set as a fund manager to manage a VCT (and do a good job) there are an awful lot of other vehicles platforms that you could work for and earn a lot more money. So your average VCT manager unless they have equity in the business is going to be pretty average at best....as soon as they’re any good they’ll get poached.
The lesson I learnt from that is that if you have the skill set as a fund manager to manage a VCT (and do a good job) there are an awful lot of other vehicles platforms that you could work for and earn a lot more money. So your average VCT manager unless they have equity in the business is going to be pretty average at best....as soon as they’re any good they’ll get poached.
Gassing Station | Finance | Top of Page | What's New | My Stuff