The perfect portfolio

We launched our first VCT offering this week in partnership with Octopus Investments, and at the time of writing, we have raised ￡332,780 from 233 investors.

This is the first time UK investors have been given access to this asset class at such a low entry point (￡500).

Six times lower, in fact, than what the market was previously offering.

As part of pulling this offering together, I’ve engaged with different stakeholders in and around this part of the market, and the opinion on a lowered threshold seems to be pretty divided.

My immediate thought in response to the more negative response?

"You know you’re onto something when people don’t like what you are doing."

Generally, though I’m welcoming of the debate here, we are treading new ground, and conversation drives awareness.

This will only contribute to further innovation in the space, which can surely only be a good thing.

Most feedback from those opposing broader access to retail investors suggests that smaller investors aren’t informed enough to understand risk and should focus on other investment types before allocating anything with a higher risk profile.

A valid observation, however, the data suggest that adding either scale-up / seed and/or both to your broader investment portfolio delivers a better return profile.

Our friends at Genuine Impact produced the graphic below that visualises this, backed up by Hardman & Co. research data.

On top of this, the big kicker for UK-based investors (and hopefully French investors soon) is the opportunity to claim 30% income tax relief on your investment into qualifying direct opportunities on Crowdcube and/or a VCT investment.

Why should only the wealthy access better returns and, most importantly, potential income tax relief?

Access is excellent, but diversification is fundamental to a successful strategy and investing in a tax-efficient fund such as a VCT removes the stock-picking element.

Just ask Jonathan Hollis , Managing Partner of Mountside Ventures:

"Crowdfunding capital from retail investors to invest in early-stage companies has been mainstream for at least a decade in the UK. Opening up access to VCTs for retail investors is a natural next step as it allows smaller ticket investors to benefit from increased diversification and lower risk"

Professionally managed funds allow a great route to achieve immediate diversification across a high-risk asset class, but what if this could be automated for you at scale across all investment types at all investment levels?

Welcome to the topic of 23’ and the week's big news, IndexGPT.

JPMorgan announced this week that they applied to trademark a product called IndexGPT.

Essentially, ChatGPT-like software service leans on a disruptive form of artificial intelligence to select customer investments.?

Now this is pretty gnarly stuff.

Is this the end of consumer financial advisory as we know it?

Well, for me, not immediately.

Humans will still play a super important role in building customer trust, and I genuinely believe humans want to buy from humans.

(I covered this point in previous ramblings here)

Assuming the robots don’t kill us first, an automated investment offering to optimise your portfolio as you go feels inevitable.

But importantly, how will we power this supercharged AI advisory doomsday?

By providing low-barrier access.

Access is necessary for there to be a starting point.

This is why we continue to push hard to bring offers such as Octopus VCT’s many and many other different investment opportunities, in the most accessible formats we can, to as many people as possible.

Investment automation is inevitable, but access is a necessity to enable it.