BVT 7% Yield

[yieldhog]

In it's last half-year report (end March), Baronsmead Venture Trust stated that 2020/21 dividends for the financial year starting October 1, 2020, would be guided at 7% of the NAV at the start of the finacial year.
I checked on the Hargreaves Lansdown website for the NAV history of BVT and it looks as though it was 71p at that time, which would give a figure of 4.97p per share for the possible dividend payout in the current BVT financial year. Looking at past BVT dividends it looks as though they go for round numbers and hence I would guess they might aim for a 5p figure for the year. The next half-year payout is not expected until March next year, so we could see around 1.5 - 2.5p at that time. Hopefully, any surprises should be on the upside.

Y

[UncleEbenezer]

VCTs have different dynamics to other investments. The high dividends are tax-efficient, but are unlikely to meet the HYP criteria of regularity, reliability, let alone a gradual upward trend.

Check the Fool's VCT board if you're interested. Note that VCTs as a whole[1] had an extraordinarily good run of about five years (my income from them peaked in 2017), but a rule change has closed that gravy-train to them.

[1] with a handful of exceptions that weren't on the MBO gravy-train in the first place.

[dspp]

Baronsmead Venture Trust

Y

Moderator Message:
relocated to VCT board, regards, dspp

[yieldhog]

I see that BVT has announced a 3.5p final dividend payable 5/3/21 xd 4/2/21.
If BVT sticks with it's 7% of NAV target for it's current financial year then I would expect the interim payable in September 2021 to be only around 1.5p, to give a calendar 2021 total of 5.0p.

I must say I'm not particularly encouraged by looking at BVT's current top ten holdings. The top 14.71% is taken by a micro cap fund, followed by 18.44% in managed cash funds yielding virtually nothing (probably negative yields after fees). I appreciate that BVT has recently raised new cash and hence the reason for a lot of liquidity, but my rationale for holding a VCT in my portfolio is to get direct exposure to a managed group of early stage companies, not to pay hefty fees upon fees for other asset classes.

Let's hope we get better news in the next annual report and see the prospect of some extra dividends from profitable disposals.
Y

[Kidman]

I appreciate that BVT has recently raised new cash and hence the reason for a lot of liquidity, but my rationale for holding a VCT in my portfolio is to get direct exposure to a managed group of early stage companies, not to pay hefty fees upon fees for other asset classes.

There has been discussion elsewhere on this board about paying fees on VCT cash.
One argument in its favour is to prevent managers rushing into potentially unsound investments just to get a management fee.
The micro fund has given good returns over the years with hopefully less risk than the main VCT investments.