VCTs fare well in 2011

Venture Capital Trusts (VCTs) remained some of the best-performing investment vehicles in December, according to new data from the Association of Investment Companies (AIC).

Despite market turbulence throughout 2011, data from the AIC indicates that VCTs - which operate similarly to investment trusts and are listed on the London Stock Exchange - fared well and matched the wider investment company sector in terms of performance.

Despite the sector as a whole falling by three per cent, this was still better than the average investment company, which fell by 11 per cent during the same time frame.

Looking at 2012, there is a sense VCTs can continue to perform strongly, so long as companies are well managed.

Annabel Brodie-Smith, communications director at the AIC, said: "The VCT sector held up relatively well last year and as it matures into its sixteenth year, the longer term performance record is encouraging for much of the sector. 

The government's VCT Scheme encourages individuals to invest their private wealth in small higher-risk trading companies whose shares and securities are not listed on recognised stock exchanges.

Investing in a VCT allows individuals to spread their risk across a number of different companies, as well as providing significant tax relief in certain situations.

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