In-built diversification
An important aspect of newer VCTs is that they can help bring greater diversification into an investor’s portfolio. Most VCTs will have this effect, by giving investors exposure to smaller companies.
However, with many newer VCTs investing in tech-enabled firms, investors can increase diversification through holding technology-related investments in their portfolios. Such investments these days can be in almost any sector. As teams invest at varying stages of growth, and across sectors, this can help to add more layers of diversification.
Adding a VCT of this kind to a portfolio of existing mature VCTs can also increase diversification. This is through holding investments at different stages of maturity, with different VCT managers, employing different strategies.
Positive ESG impact
As investor demand for ESG-focused solutions grows, another benefit of newer VCTs is that they’re a way in, enabling people to support firms making a positive impact. Within the realm of tech-enabled firms, companies are often more likely to score well on ESG factors.
Many of these firms, spanning sectors from health to education, offer solutions that can change the way we live and work for the better. And in terms of their own operations, they will be working with ESG at their core.
Beyond individual firms’ output, there’s also a positive ESG impact more generally from supporting new, growing UK companies. They can strengthen the future UK economy through creating jobs and generating tax payments. They can also help to ensure that the UK remains a world leader in business, particularly in the area of innovation.
Selecting a newer VCT
In considering newer VCTs to present to clients, advisers can look at providers that are taking a fresh approach. Those that offer value-based fee structures, clear technology mandates, tax-efficient expertise and a commitment to ESG, will be best placed to support advisers. This can help advisers in selecting from newer VCTs to find strong solutions for their clients.
Solutions for investors and support for advisers
Blackfinch works in partnership with advisers to help meet their clients’ investment needs. A specialist in tax-efficient investing, it develops solutions in response to adviser feedback.
The Blackfinch Spring VCT is a newer VCT launched in 2019. It invests in early-stage technology-enabled firms with high growth potential, a strong focus on innovation, and underpinned by clear ESG values. A 1% early bird discount is available for applications received by 1st April 2021.
For more information email enquiries@blackfinch.com, call 01452 717070 or click here.
CAPITAL AT RISK. Please refer to the product literature for all risk warnings applicable to the Blackfinch Spring VCT.
About Vince Keen
Vince Keen is Senior Business Development Manager, Blackfinch.
Vince brings over 30 years’ experience in financial services, including 11 years as a Senior Business Development Manager at Octopus Investments, specialising in tax-efficient investments. Vince began his career with TSB Bank, and then spent eight years as a financial adviser before becoming an IFA within a large regional practice. He then spent three years as a Business Development Manager with Aegon before moving to Octopus in 2008. He holds the Diploma in Financial Planning.
