By Annabel Brodie-Smith
Well we’ve survived another month of lockdown here. The home schooling is driving me mad and the whole family would benefit from more fresh air and exercise, but my mother has had the jab and daylight is lasting longer. Most importantly, I’m looking at a bunch of daffodils on my kitchen table – spring will come sooner or later.
The exciting news is we have exchanged on a converted barn in a tiny village in Oxfordshire. The barn should accommodate the needs of the whole family, including my mother who has her own annex. It’s very rural, next to a farm and opposite a 900-year-old church - a long way from our former life in a central London flat. Let’s hope we like it! This week I have been doing one of the things I enjoy most, talking to fund managers. In this case it’s been the managers of Venture Capital Trusts (commonly known as VCTs) who invest in the UK’s most innovative and exciting fast-growing companies. Do watch my discussion with them on the bottom right of the page to immerse yourself in VCTs and find out more about new areas like deep tech and edtech, the impact of the pandemic, the challenges of Brexit and how they approach ESG investing. I spoke to David Hall, Managing Director at YFM Equity Partners, managers of the British Smaller Companies VCTs, Stuart Veale, Managing Partner of Beringea, which manages the ProVen VCTs and Warren Rogers, Head of Downing Ventures and Partner at Downing, managers of the Downing VCTs. You can also read the views of these managers and others on a diverse range of topics. If you’re not familiar with VCTs, they provide finance and support to young businesses by allowing smaller investors to pool their resources and invest in a diversified portfolio of investments to spread risk. The companies VCTs invest in are high-risk and the government offers generous tax benefits to compensate you for the risks involved. To find out more about them read our guide to VCTs. As ever, there is plenty going on. In the US Joe Biden is now president and the socially distanced inauguration day was quite a spectacle. Joe’s speech conveyed his vision of “bringing America together, uniting our people, uniting our nation” and on a similar theme there was the 22-year-old Amanda Gorman’s inspiring poem “The Hill We Climb”. For those of us who enjoy drama, Lady Gaga’s national anthem was a highlight, with the singer dressed in black and red flounces with an oversized dove of peace brooch. But what does Biden’s presidency mean for the US and for the many investment companies investing there? Ian Cowie takes a look at the challenges facing Biden and how investment companies have achieved “big returns” on the back of US strength in sectors including healthcare and technology. He delves into the many investment company opportunities, concluding with the words of the legendary investor Warren Buffett: “Never bet against America”.
VCT managers discuss the impact of the pandemic on their portfolios, their recent investment activity, the economic and social benefits of VCT investing and an outlook for the sector.
One of the challenges Biden will face is the US’s relationship with China. This month we take a look at the prospects for China as Chinese New Year, the Year of the Ox, approaches. Interestingly, our investment company managers investing in China believe these tensions will “be with us for decades to come.” However, they remain positive about China’s prospects looking at the exciting opportunities from online gaming and food delivery to renewable energy.
Recently, Faith Glasgow has gone bargain hunting for unloved investment companies on wide discounts whose fortunes may be about to change. Of course, there’s no guarantee a bargain won’t stay a bargain but it’s always good to look out for value. Finally, you might be interested in Jonathan Davis’ new book, ‘The Investment Trusts Handbook’ which includes views from a host of investment company legends including Walter Price, manager of Allianz Technology Trust, Harry Nimmo, manager of Standard Life UK Smaller Companies and Charles Plowden, manager of Monks. The link to the free eBook is here and there is a special 25% discount for anyone who may want to purchase the hardback edition (RRP £29.99). The offer ends 31 March 2021 and you need to use the promotion code ITHB25OFF. Wishing you all a good month.
Annabel Brodie-Smith Communications Director, AIC
