View more on these topics

Matrix offers VCT to beat competition

Matrix Money Management is aiming to get ahead of its competitors by introducing a venture capital trust (VCT) that aims to produce a growing income for investors.

The cornerstone VCT will be managed on Matrix&#39s behalf by GLE Development Capital, a venture capital company which has been managing VCTs since 1994. It will initially invest in a portfolio of gilts, fixed-interest securities and cash, which is expected to produce a yield of 2 per cent in the first year. This income yield is expected to rise to between 5 per cent or 6 per cent a year, when the money is gradually invested into small income-generating companies.

After three years, it is expected that 80 per cent of the VCT&#39s portfolio will be invested in unquoted companies. Part of the portfolio will invest in preference shares and loan stocks, which produce higher dividends than investing in listed stocks.

The VCT will look for profitable well-established businesses that can prove they have growth potential over the next three to five years. They would also need to have strong management teams behind them and be capable of producing regular income for investors.

Many investors are currently looking for income, but are finding it difficult to meet their objectives in an environment of low interest rates and low returns from the stockmarket. This VCT, unlike the more usual growth-orientated VCTs, could meet those requirements.

However, potential investors in this VCT should be prepared for the higher risks associated with unquoted companies, which may not reach their full potential. These investors may be few and far between in the current environment of stockmarket volatility and uncertainty.

Recommended

Fidelity launch UK Superstars

FundsNetwork, Fidelity&#39s online fund superstore, has launched a new package called UK Superstars.The package give investors access to top fund managers Anthony Bolton, John Dodd and Neil Woodford, who all have a strong track record and bias towards small and medium sized companies.UK Superstars is available within an ISA or for PEP transfers at an […]

DBS members face PI threat &#39to the grave&#39

DBS members are enraged after the network withdrew professional indemnity run-off cover for ex-members, saying the advice they give now will “follow them to the grave”.Although DBS&#39 new PI policy started on August 1, members of the Misys network were not told that run-off cover had been withdrawn until five weeks later in a group […]

Aberdeen and Schroders announce fund manager losses

Fund managers Aberdeen and Schroders have announced a number of fund managers leaving on their US and UK desks.Aberdeen has announced in a restructuring of its retail side that managers of its North American fund Rubert Della-Porter and Rupert Howard have left the company. Former co-manager Alex Ingham is to take over the running of […]

&#39Index-tracking higher risk than public realise&#39

Index-tracking funds can be higher-risk investments than people looking to avoid sector or stock-specific risk realise, according to the latest survey by Standard & Poor&#39s.The rating agency says it is concerned that trackers are still regarded as the cheapest, easiest and lowest-risk option for investors who only worry about their fund underperforming the index.Director Guy […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment