2020欧洲杯小组赛赛程

Investors shun funds with 30pc tax boost despite top performance

Sales last week were down 70pc on expectations

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VCTs invest in smaller companies, which have been among the worst affected by coronavirus measures

2020欧洲杯小组赛赛程Investors concerned about the long-lasting impact the coronavirus may have on smaller businesses have shunned venture capital trusts (VCTs). 

Sales for the tax-efficient funds, which offer 30pc income tax relief on up to £200,000 per year, have dropped significantly, with experts suggesting last week they were down 70pc on normal expectation.

2020欧洲杯小组赛赛程So far this tax year £517m has been put into these funds, 8pc less than at the same point last year, but sales are losing momentum, according to data from fund shop The Wealth Club. Last week just £17m was added, down from the £35m in the same week of 2019.

Over the past two weeks just £44m has been put into the funds, down from £80m in 2019. Demand was expected to increase2020欧洲杯小组赛赛程 but coronavirus is keeping investors away.

2020欧洲杯小组赛赛程Alex Davies of The Wealth Club said: “We are still getting VCT applications, but probably 70pc less than we should be at this time of year.”

2020欧洲杯小组赛赛程VCTs are investment companies that buy into smaller companies, which have been badly hit by the virus as people have stayed indoors and not been able to support local businesses. While larger companies can take measures to reduce costs, typically small and medium-sized enterprises (SMEs) are less able to withstand a crisis. 

However, there are still good reasons to buy VCTs. They are priced less frequently and so the most recent falls may not yet be fully reflected in the price, however so far VCTs have performed better than other investment trusts with most down just a few per cent in 2020. Additionally, any money would need to fall by 30pc or more before investors lost out.

2020欧洲杯小组赛赛程As well as this, many hold a lot of cash to ensure they can support their investee companies if needed. 

“They may also be able to pick up bargains over the next year or so: there are bound to be a number of companies with decent prospects but who are finding it difficult to raise the cash,” Mr Davies said. 

2020欧洲杯小组赛赛程People should still consider a VCT if they wish to take advantage of the tax-break available, although must do this by April 5 for this tax year. People who have already used their pension and Isa allowances are typically the buyers of VCTs.