The views expressed in this article are those of its author and not necessarily those of ShareSoc
Wealth Club send me loads of useful emails and recently one arrived with this table of VCT returns over the past 10 years. For comparison, I am reminded (source eToro) that since 1926 the S&P has provided an average compound return of 10.2%.
Click here for performance data provided by Wealth Club
Source: Morningstar, Wealth Club. Data to 30 September 2022. Past performance is not a guide to the future.
I congratulate those at the top of this lists. When choosing funds, you should remember that past performance is not necessarily an indicator of future performance – as so vividly highlighted by the Woodford debacle. The ShareSoc VCT Investors Group has highlighted in the past some VCTs where performance has been poor and fees high, and those with average performance and high fees. When I was working I invested quite a lot of money in VCTs and now receive a nice amount of tax free income from them. However, more recently I have not invested as I felt the risk reward of fees, profits and shareholder returns were weighted too heavily towards the fund manager. I shall continue to add to my Vanguard S&P 500 tracker fund investments.
However, this data does highlight a very serious problem in that HM Treasury and Government are pressing ahead with a new fund for less liquid funds (The Long Term Assets Fund), where it is less than clear where the balance of risk and reward between retail investor and fund manager will work; and we await with interest the proposals the government has said it will publish in early 2023.
Cliff Weight, ShareSoc Director
Completely agree with your comments on VCTs. Fees too high for the returns generated. Performance fees are a particular problem.