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Post by moonraker on Feb 8, 2024 11:51:34 GMT
I've just received two glossy half-yearly financial reports (from Thames Ventures) and, as with other VCTs I hold, the share prices continue to fall. (It may be that over the years the price for one or two has increased by a few pence, before falling again.) In the case of Thames Ventures 1, the price was 100.4p in November 2013, 58.8p in September 2022 and 48.5p in September 2023.
I think that taking into account the tax relief on the initial purchases and the tax-free income that I've received over the years, my VCT investments have been modest (very modest?) additions to my portfolio. But I've got enough and haven't bought any new ones for several years (though I do re-invest the income from some of them). And from the start I knew that selling a holding can be problematical.
(The other frequent feature is VCTs changing their registrars, with the City Partnership in Huddersfield being a popular choice.)
Any general thoughts?
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daveb
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Post by daveb on Feb 8, 2024 17:09:59 GMT
I'd say the fairly high and tax-free dividends make them interesting to the 40% tax payer who has maxed out ISA and pension. The high and opaque charges and difficulty selling reduce the appeal somewhat.
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Steerpike
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Post by Steerpike on Feb 8, 2024 17:36:20 GMT
I have invested in 36 different VCTs in the last 11 years, some of them multiple times.
Ranked by XIRR Thames Ventures ranks 35 out of 36, with tax relief it has returned 1.91% and without -4.36%.
I have never sold VCT shares as I like having the tax free income from the dividend payments.
I don't reinvest dividends as it makes it more time consuming to keep track of annual VCT investment for each tax year.
I am much more careful about VCT investments than when I started and I have not invested this year because I haven't had available funds at the same time as an attractive VCT offer.
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Mike
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Post by Mike on Feb 27, 2024 15:32:35 GMT
With the up-front tax relief and reasonable dividend they have been okay benchmarked against inflation up until recently. I've never hard any difficulty selling them - post my share certificates off to AJ Bell and a call to their dealing team gets them added onto the buyback list if they're not properly traded. Obviously there is then a wait until the buyback but I've not had a holding that hasn't sold within 6months.
Holding a VCT for more than 5 years makes little sense these days when new offers seem to come around quite often - far better to sell and then resubscribe for new shares and get the 30% tax relief again (being careful to leave a 6 month gap between selling & buying!).
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benaj
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Post by benaj on Feb 27, 2024 15:52:56 GMT
With the up-front tax relief and reasonable dividend they have been okay benchmarked against inflation up until recently. I've never hard any difficulty selling them - post my share certificates off to AJ Bell and a call to their dealing team gets them added onto the buyback list if they're not properly traded. Obviously there is then a wait until the buyback but I've not had a holding that hasn't sold within 6months. Holding a VCT for more than 5 years makes little sense these days when new offers seem to come around quite often - far better to sell and then resubscribe for new shares and get the 30% tax relief again (being careful to leave a 6 month gap between selling & buying!). Which platform offers the best service for selling VCTs? I often found it is easy to buy but it takes long time to sell them.
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pikestaff
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Post by pikestaff on Feb 29, 2024 8:28:28 GMT
With the up-front tax relief and reasonable dividend they have been okay benchmarked against inflation up until recently. I've never hard any difficulty selling them - post my share certificates off to AJ Bell and a call to their dealing team gets them added onto the buyback list if they're not properly traded. Obviously there is then a wait until the buyback but I've not had a holding that hasn't sold within 6months. Holding a VCT for more than 5 years makes little sense these days when new offers seem to come around quite often - far better to sell and then resubscribe for new shares and get the 30% tax relief again (being careful to leave a 6 month gap between selling & buying!). Which platform offers the best service for selling VCTs? I often found it is easy to buy but it takes long time to sell them. My only experience is with interactive investor. I've long had a (fairly large) ISA account with them. When I wanted to sell VCT shares I opened a trading account so that I could send them my certificated shares to add to it. No charge for this. Processing time is usually a couple of weeks but will be longer during the ISA/VCT season, when staff are busy with that. Once added you can try to sell the shares on the market in the usual way. If there is no market you won't be able to, and you will have to phone up to ask a broker to sell them for you. Usually this means the broker will add them to the issuer's buyback queue. I don't think choice of broker makes a difference here - that's all they can do. I've never been charged extra for this. I've only paid the usual online dealing charge. All of which I think is remarkable value. If you don't have an existing account charges might differ.
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Mike
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Post by Mike on Feb 29, 2024 11:41:13 GMT
Which platform offers the best service for selling VCTs? I often found it is easy to buy but it takes long time to sell them. My only experience is with interactive investor. I've long had a (fairly large) ISA account with them. When I wanted to sell VCT shares I opened a trading account so that I could send them my certificated shares to add to it. No charge for this. Processing time is usually a couple of weeks but will be longer during the ISA/VCT season, when staff are busy with that. Once added you can try to sell the shares on the market in the usual way. If there is no market you won't be able to, and you will have to phone up to ask a broker to sell them for you. Usually this means the broker will add them to the issuer's buyback queue. I don't think choice of broker makes a difference here - that's all they can do. I've never been charged extra for this. I've only paid the usual online dealing charge. All of which I think is remarkable value. If you don't have an existing account charges might differ. Exact same experience with AJ Bell. Decent size SIPP with them. Except there was a fee for telephone order when it was needed. £25 or something like that, so II win on that front. I also have felt impressed at the value (even with the odd £25 telephone fees), my wife submitted a CREST form for a VCT holding and they rejected it because it didn't match an address the registrar had, they returned everything but it was clear that some not insignificant manual (handwritten) work was involved. Not to mention various barcode stickers AJBell presumably were using for internal tracking of original documents.
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Post by moonraker on Oct 18, 2024 8:19:58 GMT
Returning to Thames Ventures, I've just had a "circular to shareholders from them announcing the proposed merger of two of its VCTs, at a cost of £495,000. Its previous Investment Adviser was entitled to "a performance incentive fee equal to 20% of realised gains from investments". "In light of the performance of the Company and the market generally ... the performance incentive scheme as it now stands provides no additional motivation for the ... new investment adviser to drive enhanced shareholder value".
I didn't bother to read much more of the 36 pages of guff, though what I did look at confirmed my cynicism that the main beneficiaries of some VCTs (and some P2P funds) are the directors, advisers and lawyers.
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p2pfan
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Post by p2pfan on Oct 18, 2024 12:15:21 GMT
moonraker thank you for sharing your experiences. It does seem like VCTs are full of unethical behaviour and skulduggery. I was looking to shift some of my investments from P2P to VCTs, but the posts above have caused me alarm. I've become increasingly demoralised with P2P and the shady practices within P2P that are almost always lead to financial losses for lenders. I therefore want to invest my money in more trustworthy and reliable places. But the last thing I want to do is jump out of the frying pan into the fire! Has anybody had any positive experience of investing in VCTs?
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