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VCT lessons I have learnt

Think about selling. The main buyer of already-issued venture capital trusts (VCTs) is the VCT itself. How often is their buying window and what does the process involve? You might need to advise your broker of the VCT’s broker’s name, and deal by phone. Since this process costs more than trading online, it might be worth buying VCTs in larger, rather than smaller, amounts. Albion, for example, operates six VCTs, so rather than spread an investment across all six (which would incur six separate sets of dealing costs when they’re sold), it might be preferable to plump for just one.

Check how the VCT is invested. Only about two thirds of the assets in an Aim VCT might actually be invested in Alternative Investment Market (Aim) shares. Conversely, Baronsmead Venture Trust (BVT) is classified as a generalist VCT, but it has a third of its assets in Aim shares. A quarter are held in funds, and only a fifth are in private businesses.

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