By Annabel Brodie-Smith
Well it had to happen at some stage. After all those market highs, the markets have remembered they can go down as well as up, with the FTSE 100 trading at 7,223, at the time of writing, around 7% off the high of 7,779. Is this a correction or is it the end of the great bull market? That’s the big question that everyone is asking and inevitably no one knows the answer but some commentators think they do!
Interestingly, this short-term posturing is put into perspective by the new logo on this newsletter as we are celebrating 150 years of investment companies’ achievements. It’s 150 years since the launch of the first investment company, Foreign & Colonial Investment Trust, in 1868.
Inevitably, there have been highs and lows along the way including two World Wars, the Great Depression, the tech boom (and bust), the split capital trust crisis and the global financial crisis to name a few.
Whilst these were difficult times, our history demonstrates the strength and durability of the investment company structure, which is just as relevant for today’s investors. So whether the current volatility is a much-needed correction or something more prolonged, it’s reassuring to know that investment companies have seen it all before.
This month with the end of the tax year fast approaching, we are looking at Venture Capital Trusts (VCTs). VCTs invest in small, high-risk companies which can grow to become household names in the future, helping to create jobs and economic benefits. The Government offers generous tax benefits to compensate for the risks involved. To find out more about VCTs and the tax breaks read our guide.
Ian Cowie, our investment journalist expert is also a VCT investor who gives us his personal insight into VCTs’ investment benefits and risks. As Ian reminds us: “Not every acorn turns into an oak.”
We have an article of VCT managers’ views on their recent investment activity and where they are finding attractive investment opportunities. There is a fascinating article from Andy Gray, manager of Artemis VCT on how he selects companies and what he’s looking for.
Finally, Jonathan Davis, investment company director and former Independent and FT journalist, gives his perspective on the recent market volatility. He has also just published The Investment Trust Handbook 2018, featuring an investment company directory, analytical advice and contributions by a dozen leading investment company experts, including Peter Spiller, Robin Angus, John Baron and many more. It is available as a hardback book or as a (currently free) e-book download.
Have a great month.
Annabel Brodie-Smith Communications Director, AIC
