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Starting Tips For Building a Portfolio

Sophisticated and complex high-risk tax-sensitive investments in small companies: handle with care
bernie
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Starting Tips For Building a Portfolio

#232634

Postby bernie » June 28th, 2019, 9:19 pm

Hello,

What would be some advisable steps for building up a portfolio of around 5-10 VCT investments this tax year? This would be under 10% of my total investment portfolio, and I can afford to hold it for 10+ years. I have no financial commitments, and my ISA and pension allowances are already maxed out.

My goal would be to receive nice tax-free dividends.

I'm thinking of a mix of AIM and generalist VCTs. I have never purchased a VCT and have only recently started reading about them.

I am a believer in indexing/diversification, and do not believe that learning about VCT management teams and making decisions based on which firm's marketing campaign brainwashes me most effectively, is a good strategy. However, on this forum, I have read believable concerns that some VCTs might have been forced to change strategies due to recent tax changes. And that some are probably being forced to rush into investments based on the amount of capital they are raising vs the historic size of their investments.

As starting points, I am thinking of just blinding buying everything here: growthinvest dot com com/companynews/investment-watch-10-best-vcts-invest-2019/

Alternatively, I am thinking of just blindly buying up the minimum amount of the next 10 VCTs that become available here: www dot wealthclub dot co dot uk /venture-capital-trusts/

(please can someone fix those links, I can't post them)

What would be wrong with the above 2 strategies? Would they result in balanced/diversified portfolios?

Thanks,

Barnyard.

Julian
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Re: Starting Tips For Building a Portfolio

#232696

Postby Julian » June 29th, 2019, 10:36 am

I'll leave other way more expert folks to offer advice because, although I still hold 8 trusts purchased between 2012 and 2016, I have spent the last 3 years sitting things out to see what happens after the new rule changes but at least I can fix your links as requested...

https://growthinvest.com/companynews/in ... vest-2019/

https://www.wealthclub.co.uk/venture-capital-trusts/

Welcome to the forum by the way. The restriction on posting links will go away once you've made enough posts but I suspect some warning message has probably already told you that when you first tried.

I'll be interested to see the answers that you get. My current VCTs have served me well and I might well resume buying at some point, in fact I'd actively like to resume buying but only once I feel that I have a better handle on how various VCTs might perform going forward particularly in terms of dividend payouts. Perhaps some answers here might start me on that journey back to buying again.

- Julian

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Re: Starting Tips For Building a Portfolio

#232725

Postby BusyBumbleBee » June 29th, 2019, 12:21 pm

bernie wrote:Hello,... What would be some advisable steps for building up a portfolio of around 5-10 VCT investments this tax year? ... My goal would be to receive nice tax-free dividends ... I'm thinking of a mix of AIM and generalist VCTs. I have never purchased a VCT and have only recently started reading about them.

I am a believer in indexing/diversification, and do not believe that learning about VCT management teams and making decisions based on which firm's marketing campaign brainwashes me most effectively, is a good strategy. However, on this forum, I have read believable concerns that some VCTs might have been forced to change strategies due to recent tax changes. And that some are probably being forced to rush into investments based on the amount of capital they are raising vs the historic size of their investments.

As starting points, I am thinking of just blinding buying everything here: growthinvest or wealthclub ... What would be wrong with the above 2 strategies? Would they result in balanced/diversified portfolios? ...Barnyard.
First - welcome - I see this is your first post on the Lemon Fool and so you must be really interested in VCTs. You will find a lot of knowledgeable folks on this board but some of them actually just play the VCT market for the tax breaks which I assume you don't wish to do.

I first invested in VCTs in 1996 when the tax breaks were 40% CGT and 20% Income Tax - so each share cost me 40 pence effectively - today you only get 30% tax relief so you are paying 70 pence per share. That may seem a bargain BUT and it is a big BUT be aware that many, many VCTs have floundered over the years and many, many investors have lost money. Most of those failed VCTs have been subsumed into others - yet others have been taken over by a new manager. One VCT capitalised at about £80 million today has actually taken in/merged with 20 or so other VCTs which between them raised over £400 million. Ouch!

I like VCTs despite the failures but I am very cagey about investing at the moment except for using the DRIS to reinvest some dividends. You need to be aware that there are very few sales in the market - making them very illiquid if you want to get out - and you are locked in anyway for five years for tax reasons. There is effectively only one buyer - the VCT itself. If that VCT can't make buybacks because it runs out of cash the share price can plummet to absurd levels. So rather than invest now I am waiting to buy them in the second hand market which can prove very profitable. In truth I have made a lot more money by investing in distressed VCTs than in buying new shares.

Your idea of buying the first ten that come up is probably as good a way as any of selecting them if you still want to do it but you might like to concentrate on two stables : AMATI - who really do know the AIM market and are very investor friendly and Albion who have a good track record in the only type of investment currently allowed.

Before you make any decisions, do read as much as you can here about VCTs - you will learn a lot

hope this is useful - with kind regards - BBB

PS you have really only outlined one strategy as both of those links you gave will probably lead to the same VCTs

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Re: Starting Tips For Building a Portfolio

#232997

Postby bernie » June 30th, 2019, 10:02 pm

Thank you both for the feedback.

I notice from the "Amati AIM VCT shares sale after merger" thread that they are about to do another fundraiser. What would be the best way to buy it for a first time investor?

I've seen that some VCTs offer better deals for existing investors. Would it be possible to buy the VCT in 2 batches, with the aim of benefiting from better terms in the second batch?

Also, given the current dearth of offers, if I held out to buy 5 different Albion and Amati VCT's, what are the chances that I'd be able to do so by the end of March 2020?

From Albion's site, I see that they have 6 different VCTs (please correct me if I am wrong as I am new to this), and Amati only has 1 VCT fund.

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Re: Starting Tips For Building a Portfolio

#233000

Postby bernie » June 30th, 2019, 10:11 pm

BusyBumbleBee wrote:
bernie wrote:I like VCTs despite the failures but I am very cagey about investing at the moment except for using the DRIS to reinvest some dividends. You need to be aware that there are very few sales in the market - making them very illiquid if you want to get out - and you are locked in anyway for five years for tax reasons. There is effectively only one buyer - the VCT itself. If that VCT can't make buybacks because it runs out of cash the share price can plummet to absurd levels. So rather than invest now I am waiting to buy them in the second hand market which can prove very profitable. In truth I have made a lot more money by investing in distressed VCTs than in buying new shares.


Hi BusyBumbleBee,

Thanks for your details answer. If it's not too much to ask, could you provide some examples of buying distressed VCTs?

Though not a VCT, what are your thoughts on buying Patient Capital?

Thanks,

Bernie.

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Re: Starting Tips For Building a Portfolio

#233013

Postby UncleEbenezer » June 30th, 2019, 11:16 pm

OK, let me take issue with BBB. I wouldn't say his advice is bad, just perhaps oversimplistic. Which is what you asked for, but also a red rag to a bull after a glass of something rather nice.

The difficulty we all face in giving advice is that past performance is no guide to the future. That's more true in VCTs than anywhere, due to some major rule changes that changed the whole industry. The MBO, the gravy-train that powered most of the Big and Middling Winners of recent years (Baronsmead, Northern, Mobeus, British Smaller and Maven) has been forbidden to VCTs, forcing those managers outside their comfort zones. We can only speculate on where that may lead.

BBB says Albion. Before the rule changes, they were decent but an also-ran in the recommendations. They are also affected by the rule changes, but because they also have a decent showing in investments that are still allowed, they're likely to be better-placed. Mainstream VCTs who won't have to change significantly in response to the new rules are the ProVens and the biggest of all, Octopus Titan. The former are worth a look, though they have a patchy track record. I used to like Titan, but now I'm out: they may have some great investments, but the managers get most of the profits to an extent that one might as well pay tax instead.

In AIM, Amati was my long-term underperformer until it had a couple of years' good run - and it still hasn't restored the dividend it used to target. AIM VCTs are volatile, and it's luck of the draw whether you get in before a big rise or a big drop, or somewhere neutral. I hold Amati, Octopus and Unicorn, and wouldn't particularly recommend any of those as much better or worse than each other. You might look at portfolio sector weightings - like IT vs biotech - and decide where you'd rather be.

Secondhand VCTs are not something I'd recommend to a newbie. And right now, there aren't any I'd consider buying secondhand. Buy some new now and start taking an active interest, and when a juicy opportunity arises as anticipated by BBB, you'll no longer be a newbie. I think you've grasped the principle: a VCT that looks attractive secondhand is one that's hit the same kind of trouble as Woodford, and the buying decision is a judgement call on its recovery prospects.

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Re: Starting Tips For Building a Portfolio

#233015

Postby scotia » June 30th, 2019, 11:33 pm

As explained by others, VCTs are going through a transition with new rules that force them to make higher risk, earlier start up companies. And these are unlikely to provide dividend returns for some time. Also AIM shares had a good run, but are now slipping back from their peak around September 2018. So you will probably find that a lot of old-timers in VCT purchases are being more cautious in their purchases. I personally am still purchasing new VCTs and carrying out DRIS (dividend re-investment) purchases, however I am also selling off VCTs at the end of a 5 year hold - so the tax break is a major feature in my returns.
So which new VCT issues (which I already own or have owned) will I be considering in the present tax year, assuming that they will announce offers?
Amati have suffered over the past year with the falling AIM market, but it would remain my AIM choice. Unicorn AIM VCT (which I also own) sits at too large a discount for my liking.
The Northern and Baronsmead Stables have always performed well, and there is usually a strong demand for their shares. I also have been reasonably happy with my Proven, Mobeus and British Smaller Cos shares. I quite like the Maven VCTs, but they have tended to languish with relatively high discounts and spreads, which makes a sell-after-5years policy less attractive.
Many years ago, a number of VCTs operated with very large discounts, and second hand purchases certainly made sense - especially as the VCTs commenced buy-backs to reduce the discount. With some VCTs, contributors to TMF suggested it was "fill your boots" time - and I filled some very modest boots, with satisfactory results. I think those glory days are past, although there may still be some bargains. I notice that Chrysalis VCT is sitting at a fairly large discount, and is paying substantial dividends. This is a small VCT which appears to be in rundown - have a look at its most recent report
https://www.lse.co.uk/rns/CYS/correctio ... v32wh.html
However I'll probably leave it alone.
Edit - corrected the link to the most recent Chrysalis report

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Re: Starting Tips For Building a Portfolio

#233082

Postby BusyBumbleBee » July 1st, 2019, 9:54 am

Hi I have answered your questions in the text below - [thus] hope it is useful
bernie wrote:I notice from the "Amati AIM VCT shares sale after merger" thread that they are about to do another fundraiser. What would be the best way to buy it for a first time investor? [either thru one of the two sites you mentioned or direct - best to wait and see what the offer is]

I've seen that some VCTs offer better deals for existing investors. Would it be possible to buy the VCT in 2 batches, with the aim of benefiting from better terms in the second batch? [yes - but you could also buy a few in the market]

Also, given the current dearth of offers, if I held out to buy 5 different Albion [there is now very little difference between the albion VCTs but AAVC still has more asset backed investments] and Amati VCT's, what are the chances that I'd be able to do so by the end of March 2020? [more or less certain ly]

From Albion's site, I see that they have 6 different VCTs (please correct me if I am wrong as I am new to this), and Amati only has 1 VCT fund. [correct]

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Re: Starting Tips For Building a Portfolio

#233109

Postby BusyBumbleBee » July 1st, 2019, 11:27 am

bernie wrote:... could you provide some examples of buying distressed VCTs?

Though not a VCT, what are your thoughts on buying Patient Capital? Thanks, Bernie.

My very first distressed VCT buy was in fact British Smaller Companies(BSV) in May 2004. The shares were languishing at about 43 pence so on a whim I bought a lot (I already owned 20,000) and in June the company announced an 11% dividend and that it was going to buy back shares at a 10% discount. By the end of the year the SP was 70 and I had had a dividend of 4.8 pence as well. Anyway I sold those at the year end. As a by-the-by I have also sold off all my BSV and avoided paying back the CGT rollover relief by spreading the sales over three years. It was apparent by then that BSV had in fact been a one shot wonder with its investment in Go Outdoors and has subsequently cut its dividend.

Since then I have had biggish successes with Core, Chrysalis and the Ventus twins. and some other minor successes with, amongst others, some of the Foresight VCTs.

The only one of these I still hold is Chrysalis - which as, Scotia, rightly says is in rundown. It yields 8,7% (tax free) and pays some specials as well. I have done well out of it BUT this is NOT a recommendation to buy it as there is plenty that could go wrong here.

On Patient Capital - I have no view - but it is not tax free nor does it qualify for IHT relief - so of no interest to me at all.

with kind regards - BBB

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Re: Starting Tips For Building a Portfolio

#233121

Postby BusyBumbleBee » July 1st, 2019, 12:20 pm

UncleEbenezer wrote:OK, let me take issue with BBB. I wouldn't say his advice is bad, just perhaps over simplistic. Which is what you asked for, but also a red rag to a bull after a glass of something rather nice. [Hmm... Assume this was imported vino :shock: UncleE, tut tut - should drink good old English beer or cider ;) ]

The difficulty we all face in giving advice is that past performance is no guide to the future. That's more true in VCTs than anywhere, due to some major rule changes that changed the whole industry. The MBO, the gravy-train that powered most of the Big and Middling Winners of recent years (Baronsmead, Northern, Mobeus, British Smaller and Maven) has been forbidden to VCTs, forcing those managers outside their comfort zones. We can only speculate on where that may lead.

BBB says Albion. Before the rule changes, they were decent but an also-ran in the recommendations. [I have held since 1996 and they have done me very well - and still do - at one time they were giving a 10p a year dividend. Their annual top ups are very popular and usually over subscribed. I still participate in their DRIS] They are also affected by the rule changes [no new asset backed investments], but because they also have a decent showing in investments that are still allowed, they're likely to be better-placed. Mainstream VCTs who won't have to change significantly in response to the new rules are the ProVens and the biggest of all, Octopus Titan. The former are worth a look, though they have a patchy track record. I used to like Titan, but now I'm out: they may have some great investments, but the managers get most of the profits to an extent that one might as well pay tax instead.

In AIM, Amati was my long-term underperformer until it had a couple of years' good run - and it still hasn't restored the dividend it used to target. AIM VCTs are volatile, and it's luck of the draw whether you get in before a big rise or a big drop, or somewhere neutral. I hold Amati, Octopus and Unicorn, and wouldn't particularly recommend any of those as much better or worse than each other. You might look at portfolio sector weightings - like IT vs biotech - and decide where you'd rather be. [I like Amati because they manage a very narrow spread and you can always sell: others have a spread of 2 or more pance and some have outrageous spreads and very small market sizes]

Secondhand VCTs are not something I'd recommend to a newbie. And right now, there aren't any I'd consider buying secondhand. Buy some new now and start taking an active interest, and when a juicy opportunity arises as anticipated by BBB, you'll no longer be a newbie. I think you've grasped the principle: a VCT that looks attractive secondhand is one that's hit the same kind of trouble as Woodford, and the buying decision is a judgement call on its recovery prospects.

This is very good advice from UncleE. I have marked in bold what I think is particularly good and couldn't resist adding some comments!
kind regards - BBB

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Re: Starting Tips For Building a Portfolio

#233132

Postby UncleEbenezer » July 1st, 2019, 12:55 pm

BusyBumbleBee wrote: [Hmm... Assume this was imported vino :shock: UncleE, tut tut - should drink good old English beer or cider ;) ]

Pfft. Yes it was imported wine followed by imported coffee: the right drinks for the occasion. Right now it's good English apple juice with my lunch. This evening it'll be good English beer after singing.
[I like Amati because they manage a very narrow spread and you can always sell: others have a spread of 2 or more pance and some have outrageous spreads and very small market sizes]

These things change. It's not so long since Amati had spreads of around 30%. Octopus have a much longer track record of providing a market to sell at a reasonable price. One of the signs of a Potential Opportunity in the secondary market is when these prices and spreads look really nasty.

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Re: Starting Tips For Building a Portfolio

#233227

Postby BusyBumbleBee » July 1st, 2019, 6:47 pm

Good Evening, Bernie (and UncleE) - AAVC the Albion flagship VCT posted its results today see https://www.investegate.co.uk/albion-ve ... 4108H0251/

They have a habit of listing all their dividends since inception so you can see how they have performed over that 23 years.

have a look at financial highlights and the tables therein - I usually read the whole report overnight and you can learn a lot about VCTs from reading it all.

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Re: Starting Tips For Building a Portfolio

#233437

Postby james188 » July 2nd, 2019, 4:11 pm

A lot of very good tips have already been given by posters, but I would add/supplement as follows with specific reference to the so-called generalist VCTs:-

1. I would definitely not buy blind as and when new offers come out (the main season being late Autumn through to the start of Spring). It is worth waiting for the best offers - and they tend to come together in a rush and the best ones sell out pretty fast. It is easy to find out which with minimal research through brokers such as Wealth Club or by checking the announcements that the VSTs make themselves. Some VCTs offer priority to existing shareholders, so it is well worth thinking about buying a small number of shares in the secondary market in advance (too late if you wait until the offer has been announced). Some VCTs also give preferred financial terms to existing shareholders.

2. Not all VCTs are equal, or even close. If you want objective facts, try the AIC (Association of Investment Companies) website, which detailed performance analysis for VCTs over varying periods (e.g. last 5 and 10 years). More recent years are most relevant, in my view, given the rule changes that other posters have mentioned.

3. The problem with the published NAVs are that they are often quite subjective, given that many of the holdings are in unquoted companies, increasingly growth stocks where the companies are not (yet) profitable. So, it is worth comparing prices realised on disposals as against the last published valuations. The proof of the pudding is in the eating. For example, the Mobeus VCTs have announced today that they have realised investments in Plastic Surgeon Holdings and ASL Technology Holdings Limited. The prices achieved were above the last published valuations and the RNS' quantify the impact (uplift) of those transactions in isolation on the NAVs. If disposals are regularly at figures beyond published valuations, that is a big red flag.

4. As VCT shares are illiquid, the main buyers are the VCT companies themselves; whilst not guaranteed, they provide an important exit route. They will publish their policy as to buyback policy. For example, ProVen's policy is to buy at an approximate discount of 5% to NAV. Mobeus discount to the middle market quotation for the shares. I would be wary of a VCT where the discount is very high (e.g. over 10%).

5.Whilst it is true that VCT investments are now more risky as a result of rule changes - e.g. MBO/secured asset deals are no longer allowed - a number of VCTs still have very significant "rump" portfolios which were grandfathered under the new rules. So, whilst they will disappear over time, they often provide an ongoing source of income and the investments are typically more mature and profitable companies. We are in a transition period that will last for a number of years. To give a specific example, Mobeus provide an analysis in their annual reports as to the age of the portfolio and the types of transaction (pre and post the 2015 rule changes).

6. Some VCTs are fairly cautious as to the amounts of new funds that they raise (Northern spring to mind), whilst others are less so and one in particular regularly raises what I regard as eye watering amounts. The potential problem that follows is that there are strict periods (recently slightly relaxed) as to when the cash has to be invested, so the VCT could be forced to pay top dollar prices. Even if it can hang on to the cash, manager fees are usually charged on the assets under management, including "dead" cash.

7. All the above assume that you are willing to do some legwork, as long as it is fact based and not just wading through promotional literature. If you are not and really do intend to buy blind, you are materially adding to your level of risk. Good luck, in any event.

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Re: Starting Tips For Building a Portfolio

#233465

Postby BusyBumbleBee » July 2nd, 2019, 5:36 pm

Very good advice, James118 but I am a bit puzzled by this statement in red in this quote from your post
james188 wrote: 3. The problem with the published NAVs are that they are often quite subjective, given that many of the holdings are in unquoted companies, increasingly growth stocks where the companies are not (yet) profitable. So, it is worth comparing prices realised on disposals as against the last published valuations. The proof of the pudding is in the eating. For example, the Mobeus VCTs have announced today that they have realised investments in Plastic Surgeon Holdings and ASL Technology Holdings Limited. The prices achieved were above the last published valuations and the RNS' quantify the impact (uplift) of those transactions in isolation on the NAVs. If disposals are regularly at figures beyond published valuations, that is a big red flag.


Surely if the VCT is publishing a slightly (or a lot) lower valuation it is a good thing because a) the manager has a smaller fee and b) the board and manager are not flannelling the shareholders. If it were the other way round it would be a huge red flag for me. Indeed one would always expect a manager to sell at least marginally above the last published NAV simply because a growing company increases in value almost linearly,

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Re: Starting Tips For Building a Portfolio

#233486

Postby james188 » July 2nd, 2019, 6:24 pm

Indeed. It was a typo on autocorrect (a curse). It should have read "beneath".

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Re: Starting Tips For Building a Portfolio

#233634

Postby oxmatt » July 3rd, 2019, 11:34 am

bernie wrote:I've seen that some VCTs offer better deals for existing investors. Would it be possible to buy the VCT in 2 batches, with the aim of benefiting from better terms in the second batch?


It would probably be difficult to do two batches in the same issue year and still get the early bird discount for both given timing of first share allotments often coincide with end of the early bird period which often outweighs the existing investor deal. As others mentioned buying a few shares in the secondary market also achieves the existing shareholder discount for new issues (most simply as certificated shares so you are on the register rather than in a nominee account - although this is also possible just needs more legwork and paperwork) but the transaction costs might not outweigh the savings so would need to consider on a case by case basis depending on your proposed lot sizes.

In fact some popular issues - e.g. Northern, Baronsmead and British Smaller probably required a secondary purchase in advance for a new investor to get an allocation in the recent issues and even this might not guarantee an allocation in smaller fund raises.

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Re: Starting Tips For Building a Portfolio

#233787

Postby bernie » July 3rd, 2019, 9:29 pm

UncleEbenezer wrote:BBB says Albion. Before the rule changes, they were decent but an also-ran in the recommendations. They are also affected by the rule changes, but because they also have a decent showing in investments that are still allowed, they're likely to be better-placed. Mainstream VCTs who won't have to change significantly in response to the new rules are the ProVens and the biggest of all, Octopus Titan. The former are worth a look, though they have a patchy track record. I used to like Titan, but now I'm out: they may have some great investments, but the managers get most of the profits to an extent that one might as well pay tax instead.


Hello Uncle Ebenezer,

What makes Titan too expensive? The details are here: octopusinvestments dot com/investor/our-products/venture-capital-trusts/octopus-titan-vct/

I see a 2% annual fee and 20% performance fee.

Why are there 2 categories of fee - "Advised (initial only)" and "Advised (initial and ongoing)"? What if I have not paid an advisor to give me advice?

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Re: Starting Tips For Building a Portfolio

#233790

Postby bernie » July 3rd, 2019, 9:33 pm

scotia wrote:So which new VCT issues (which I already own or have owned) will I be considering in the present tax year, assuming that they will announce offers?
Amati have suffered over the past year with the falling AIM market, but it would remain my AIM choice. Unicorn AIM VCT (which I also own) sits at too large a discount for my liking.


Hi Scotia,

Thanks for responding to my question. Why is the Unicorn discount too large for your liking? On the AIC website I see it is 12%.

www dot theaic dot co dot uk/companydata/C0LJT

In general, would it be advisable to look for VCTs with a discount/premium within a certain range?

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Re: Starting Tips For Building a Portfolio

#233826

Postby UncleEbenezer » July 4th, 2019, 12:03 am

bernie wrote:Hello Uncle Ebenezer,

What makes Titan too expensive? The details are here: octopusinvestments dot com/investor/our-products/venture-capital-trusts/octopus-titan-vct/

I see a 2% annual fee and 20% performance fee.

The problem with the 20% is that there is no annual hurdle. There was an initial hurdle, but since that has been reached, the 20% is awarded on everything above that. Not - as is more usual (and acceptable) - on everything above a hurdle like 6% or RPI+2% or LIBOR+2% or somesuch, but on everything above 0%.
Why are there 2 categories of fee - "Advised (initial only)" and "Advised (initial and ongoing)"? What if I have not paid an advisor to give me advice?

I have no idea. It may have something to do with whether you or they are paying an advisor's commission. Since I've never used an advisor, I've never paid attention to that kind of clause.
Why is the Unicorn discount too large for your liking? On the AIC website I see it is 12%.

Just that it's higher than the industry average. Not an issue if you hold forever, but a Bad Thing if you want to recycle VCT holdings as some do.

Of course, that could very well change over the five years you're locked in to it.

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Re: Starting Tips For Building a Portfolio

#233829

Postby scotia » July 4th, 2019, 12:25 am

bernie wrote:Hi Scotia,
Thanks for responding to my question. Why is the Unicorn discount too large for your liking? On the AIC website I see it is 12%.

The 12 month average discount for Unicorn is 12.87%
The 12 month average discount for Amati is 7.54%
So when selling, Amati has a head start of 5%
Over the past 5 years Amati has also significantly out performed Unicorn.
Although the performance over the next 5 years can't be predicted, the company reports show no indication that the difference in the discount will reduce. So, in my view, Amati looks the better bet on both counts.
However I should stress "bet". VCT investment, particularly since the recent investment rule changes, is definitely a bet - which some of us think will provide an acceptable, but probably not a substantial return. Hence a difference of 5% in discount matters.


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