The Lemon Fool

I had a limit sell order on BVT for over a month. The limit was well within the indicated price at the time but BVT has been sliding lately so my limit order looked out of line with the market. I called my broker today to ask for my limit order to be changed to a market order and after a conversation with the broker they eventually came back with a bid for all of my shares. They indicated that Barronsmead are intending to announce a buy-back soon and I had the option of waiting for that, bur I chose to sell and move on. I've got no doubt the buy-back will offer better terms than the price I received today but I've been disappointed with the way Barronsmead has run this fund and believe I can find a better home to the proceeds.

Y

How things change. 20 years ago this fund had few equals.

I've had Baronsmead since the early days but am now in a quandary.

Do I sell like yieldhog or hang on in the hope of recovery?
While I have been mulling this over in recent years the value has gone nowhere.
Looking at the last annual report for Baronsmead 1 I see that the NAV total return was the same at year end 2022 as year end 2017. All the dividends paid out equalled NAV loss. I hang on to get my money back in divdends as it feels easier than selling but maybe I should cut my losses.

Maybe most VCTs are past their best? They are subject to far more restrictions and rules than 20 years ago and now we can get a better post-tax return on gilts than we can from Baronsmead VCTs.

My feeling is that a lot of the NAV loss is due to a general decline in the AIM market. I have seen the same as you describe in my VCT holdings.

Indeed -- Baronsmead have far more (historically around 25%, tho' it will vary with market and valuation shifts) in AIM, whereas the likes of Northern, Albion and Mobeus has little or none. The really bad performers over the past 12-24 months have been the pure AIM trusts (Amati especially).

From the BVT half yearly report releaased 11 June 2024:-

"During the six months to 31 March 2024, the Company's NAV per share increased 4.2 per cent. from 52.9p to 55.1p after the payment of the final dividend of 2.5p per share on 8 March 2024.
The Board is pleased to report as at 31 May 2024, the NAV was 57.1p per share, a 3.6 per cent. increase over the NAV as at 31 March 2024. This was driven by firmer quoted markets and further increases in the value of the Company's listed investments.
The Board has declared an interim dividend of 1.75p per share to be paid on 9 September 2024 to shareholders on the register as of 9 August 2024."

BVT also announced that Susannah Nicklin is to step down as a Non-Executive Director with effect from 30 June 2024 due to an increase in her other work commitments.

Kidman wrote:From the BVT half yearly report releaased 11 June 2024:-

"During the six months to 31 March 2024, the Company's NAV per share increased 4.2 per cent. from 52.9p to 55.1p after the payment of the final dividend of 2.5p per share on 8 March 2024.
The Board is pleased to report as at 31 May 2024, the NAV was 57.1p per share, a 3.6 per cent. increase over the NAV as at 31 March 2024. This was driven by firmer quoted markets and further increases in the value of the Company's listed investments.
The Board has declared an interim dividend of 1.75p per share to be paid on 9 September 2024 to shareholders on the register as of 9 August 2024."

BVT also announced that Susannah Nicklin is to step down as a Non-Executive Director with effect from 30 June 2024 due to an increase in her other work commitments.

My total return with a new issue of BVT purchased in January 2020 is still under water by about -8%, if there had been no initial tax rebate.
However including the tax rebate , the current total return increases to around +32%.
This is still well below the historical returns from Baronsmead VCTs when there were mad scrambles to buy new issues.

Unfortunately, it is clear that the Baronsmead VCTs reacted poorly to the rule changes that forced VCTs to invest in earlier stage growth companies. Compare the huge gap in performance to the Mobeus VCTs post 2015. Although many AIM stocks have taken a kicking, I think that the main problems relate to the unquoted portfolio. I think that part disposals by Baronsmead of successful AIM investments has masked the dire performance of the unquoted portfolio.