Bernard Fairman and his team at Foresight Technology VCT have produced far and away the best results of any venture capital trust since its launch in November 1977.
Returns have averaged 22.7 per cent a year, including over 150 per cent of tax-free dividends. The next best returns have been only around 8 per cent a year.
The continued success of Foresight is due to the team between them having 139 years' experience of investing in smaller companies and extracting value for shareholders.
Now, with tax breaks of 40 per cent for both higher-rate and basic-rate taxpayers plus tax-free dividends and capital gains, an investment in their new Foresight 2 VCT is an outstanding potential investment.
Taking into account the past performance of all VCTs and a 40 per cent tax break, the vast majority of all VCTs would have shown positive returns over the past five years – much more than the FTSE 100 index, which fell by 3.8 per cent.
Foresight expects to make large capital gains on three companies over the next few months. These are Broadreach Networks, a wi-fi access company whose shareholders include Intel, Virgin and BT; Oxonica, which produces a fuel additive which improves the performance of diesel fuel by a substantial margin; and Sarantel, which provides special antennas which double the range of mobile phones with less radiation.
I believe that investing in the new Foresight 2 VCT, with a 40 per cent tax break, is much more likely to produce an outstanding tax-efficient return than an investment in a FTSE 100 tracker fund or any portfolio of bigger company shares, with only a little more risk.