Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more.
Don't invest unless you're prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong. Take 2 mins to learn more.
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Estimated reading time: 2 min
Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.
What are the key risks?
1. You could lose all the money you invest
• If the business you invest in fails, you are likely to lose 100% of the money you invested. Most start-up businesses fail.
2. You are unlikely to be protected if something goes wrong
• Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here.
• Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated firm, FOS may be able to consider it. Learn more about FOS protection here.
3. You won’t get your money back quickly
• Even if the business you invest in is successful, it may take several years to get your money back. You are unlikely to be able to sell your investment early.
• The most likely way to get your money back is if the business is bought by another business or lists its shares on an exchange such as the London Stock Exchange. These events are not common.
• If you are investing in a start-up business, you should not expect to get your money back through dividends. Start-up businesses rarely pay these.
4. Don’t put all your eggs in one basket
• Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well.
• A good rule of thumb is not to invest more than 10% of your money in high-risk investments.
5. The value of your investment can be reduced
• The percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.
• These new shares could have additional rights that your shares don’t have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.
If you are interested in learning more about how to protect yourself, visit the FCA’s website here.
It is a question many investors will be keen to have answered. But it can be difficult to get the overall picture.
To make it easier, we looked at the performance of the 10 largest VCT managers over a period of three, five and 10 years.
In the 10 years to June 2024, the 10 largest generalist VCT managers have delivered an average NAV total return of 67.0% (assuming dividends are reinvested) – compared to 77.8% for the UK main market. Meanwhile, AIM VCTs have on average fared better than AIM, up 19.3%, outperforming the market by 11.7%. Past performance is not a guide to the future.
Remember, VCTs invest in small companies, which are more volatile and more likely to fail than their larger counterparts. For this reason, VCT investments are long-term investments and are not for everyone. They are for experienced investors who have no need for immediate liquidity and can withstand a potential total loss.
The table below shows the cumulative performance for each VCT.
Important: The information on this website is for experienced investors. It is not advice nor a research or personal recommendation to invest. If you’re unsure, please seek advice.
Generalist VCTs’ performance – 10 largest managers
| VCT | 3 Years | 5 Years | 10 Years |
|---|---|---|---|
| Albion Crown VCT | 6.1% | 24.1% | 93.4% |
| Albion Development VCT | 11.2% | 34.0% | 112.8% |
| Albion Enterprise VCT | 14.3% | 36.5% | 115.2% |
| Albion KAY VCT | 8.2% | 28.7% | 81.9% |
| 11.6% | 24.6% | 72.5% | |
| Albion VCT | 2.2% | 8.5% | 68.8% |
| Baronsmead Venture Trust | -14.3% | 9.3% | 39.8% |
| Baronsmead Second Venture Trust | -16.2% | 14.5% | 39.5% |
| British Smaller Companies VCT | 21.9% | 67.5% | 129.8% |
| British Smaller Companies VCT 2 | 18.6% | 60.5% | 101.4% |
| Foresight VCT | 35.0% | 59.0% | 84.7% |
| Foresight Enterprise VCT | 20.7% | 43.3% | 34.6% |
| Foresight Technology VCT – FWT shares | 0.8% | - | - | Thames Ventures VCT 1 (Foresight) | -12.8% | -24.8% | -18.0% |
| Thames Ventures VCT 2 - Venture Shares (Foresight) | -11.5% | -25.5% | – |
| Thames Ventures VCT 2 - Healthcare Shares | -24.9% | -23.4% | – |
| Maven VCT | 3.3% | 7.7% | 44.0% |
| Maven VCT 3 | 1.8% | 12.7% | 41.4% |
| Maven VCT 4 | -2.5% | 9.6% | 31.1% |
| Maven VCT5 | 2.5% | 15.1% | 70.2% |
| 2.2% | 67.2% | 118.4% | |
| -3.6% | 75.3% | 164.8% | |
| Northern Venture Trust | -5.3% | 24.3% | 70.9% |
| Northern 2 VCT | -1.6% | 22.2% | 70.9% |
| Northern 3 VCT | -1.8% | 23.1% | 69.9% |
| Octopus Apollo VCT | 25.1% | 49.4% | 65.6% |
| Octopus Titan VCT | -33.5% | -8.8% | 23.7% |
| Pembroke VCT BShares | -2.1% | 18.3% | - |
| ProVen VCT | 2.7% | 7.9% | 50.6% |
| 3.8% | 9.5% | 33.7% | |
| Puma VCT 13 | 14.9% | 62.7% | - |
| Puma Alpha VCT | -0.6% | - | - |
| Average generalist VCTs | 2.3% | 23.6% | 67.0% |
|---|
AIM VCTs’ performance
| VCT | 3 Years | 5 Years | 10 Years |
|---|---|---|---|
| Amati AIM VCT | -44.5% | -16.0% | 37.1% |
| Hargreave Hale AIM VCT | -41.9% | -7.5% | 3.9% |
| Octopus AIM VCT | -40.3% | -10.7% | 1.2% |
| Octopus AIM VCT2 | -39.5% | -8.1% | 4.3% |
| Unicorn AIM VCT | -32.3% | 9.7% | 49.8% |
| Average AIM VCTs | -39.7% | -6.5% | 19.3% |
|---|
Source: Morningstar, Wealth Club. Data from 31 March 2014 (or VCT launch date if later) to 30 June 2024. Past performance is not a guide to the future.
See five-year discrete performance of the VCTs listed above
Wealth Club aims to make it easier for experienced investors to find information on – and apply for – investments. You should base your investment decision on the offer documents and ensure you have read and fully understand them before investing. The information on this webpage is a marketing communication. It is not advice or a personal or research recommendation to buy any of the investments mentioned, nor does it include any opinion as to the present or future value or price of these investments. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination.
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