Nothing ventured, nothing gained or so it seems. In the 12 months ending 30 November 2011, six of the top ten performing funds were venture capital trusts (VCTs), says Leonora Walters in Investors Chronicle.
On the Association of Investment Company's list, Maven Income and Growth VCT 4 was ninth. The fund, which focuses on generating long-term capital growth and income, has a diversified portfolio in riskier unquoted and Aim-listed British firms.
VCT dividends are free from income tax and profits made from share disposals are exempt from capital gains. "VCTs are an overlooked opportunity," manager Bill Nixon told Shares magazine. Over the last decade VCTs have been "reinvented", with poorly performing managers and sub-scale operators "weeded out".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Nixon, who has 30 years of banking and private-equity experience, is doing something right. The fund has a healthy record over one, three and five years, with a share price total return over three years at 225% and net asset value (NAV) total return of 129.6%.
The trick is the fund's regional presence. Investment teams meet 400 to 500 companies a year, but only invest in five or six. The fund, which trades at a discount to NAV of 1.9%, will sell down its Aim portfolio and redeploy funds into income-producing private ventures.
Aim is not a "happy hunting ground", but there are opportunities in growth businesses while bank finance remains tight. "Our focus is on identifying the good, solid, cash-generative businesses left in Britain," Nixon adds. "There are no loss-making companies in our portfolio."
Contact: 020-7463 6452.
Malvern Income and Growth VCT 4 SFund top ten holdings
| Torridon Capital | 6.5 |
| Westway Services | 6.0 |
| Dalglen 1150 | 5.4 |
| Blackford Capital | 4.1 |
| Nessco Group Holdings | 4.1 |
| Staffa Capital | 4.1 |
| Lawrence Recycling and Waste Management | 3.8 |
| Tosca Penta | 3.6 |
| Ailsa Craig Capital | 3.5 |
| Beckford Capital | 3.3 |
-
FTSE 100 hits record highs – why is it rising and will we see more gains?Advice UK equities have been described as unloved for a long time but as the FTSE 100 hits new highs, we explain if now is the time to buy British.
-
How to invest in copperIt may be time to invest in copper as the red metal appears poised for a big jump. Dominic Frisby looks at what should investors should buy
