UK - VCTs held for the long-term, says Noble

Rob
29 March 2006

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New research from Noble Fund Managers has found that 81% of intermediaries are investing VCT money on behalf of their clients with a view to holding their investments for the long-term, an eight- to ten-year time horizon. Only 11% said that their clients were investing in VCTs with a view to exiting within the three to five years. The news comes following the Chancellorтs Budget statement which specifies, as part of a number of changes to the VCT market, that the minimum holding period for investors having to hold new shares has been raised from three to five years.

Noble is encouraging investors to look to mature VCTs which have already invested the majority of their capital in a well diversified portfolio and are therefore able to offer investors regular income by way of tax-free dividends from the outset.

The research also explored how intermediaries believe their clients should invest their VCT portfolio across four types of VCTs which were specified as Specialist, AIM, Mixed and Purely Unquoted, the latter being suggested as a new category. On average, intermediaries recommended investing across the categories in the following proportions: 37% in an AIM VCT, 25% to Mixed portfolio, 20% to a Specialist portfolio and 18% to a purely unquoted VCT.