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VCTs: how to invest in Britain s most exciting companies

Professional investor Alex Davies of Wealth Club picks four of his favourite venture capital trusts that invest in small, innovative, fast-growing British businesses.

Should you risk buying into venture capital trusts (VCTs)?

© Elvie US markets are replete with dynamic technology companies; Europe’s are staid and boring. Or so many investors think. But this is not entirely accurate. On the continent, for instance, tech companies now boast a bigger market capitalisation than banks and energy companies.  In Britain, on the other hand, investors seeking burgeoning, earlier stage businesses tend to go for the private firms found in listed portfolios such as the Chrysalis investment trust, which has been a top performer in recent years. However, there is also the long-established venture capital trust (VCT) sector. According to investment services group Wealth Club, these tax-efficient listed funds are increasingly investing in the same kind of fast-growing, valuable companies you’d expect to find in the Chrysalis fund and bigger rivals such as Baillie Gifford’s Scottish Mortgage trust. 

Four venture capital trusts that offer growth, income and tax relief

Venture capital trusts that offer growth, income and tax relief Professional investor Alex Davies, founder of high-net-worth investment service Wealth Club, is a fan of venture capital trusts (VCTs). Here, he picks some of his favourites. 8 Jan 2021 Last year was dominated by disruption and uncertainty. But 2020 also saw venture capital trusts (VCTs), introduced 25 years ago to support small, innovative businesses, emerge as the investment of the moment.  Firstly, with tax rises of more than £40bn a year “all but inevitable”, according to the Institute for Fiscal Studies, VCT tax relief looks increasingly attractive. When investing in VCTs you receive up to 30% tax relief – a £3,000 saving on a £10,000 investment. All returns, typically paid through dividends, are also tax-free and you can invest up to £200,000 a year.

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