What, why, when? Using VCTs in portfolio construction

The first question to ask is: what are they for? Are they tax-saving products or are they investment products? In my view they are investment products with good tax benefits. So the next question to ask is: where do they fit into a properly constructed investment portfolio? The key to this second question is for financial advisers to have a documented investment process. If they think small companies are too risky, they shouldn't be recommending VCTs for tax benefits. VCTs can make great investments for the right kind of client, but advisers need to recognise that these investments are t...