With so much of the innovation driving our economy coming from venture capital-backed companies, why can’t you find VC in most people’s investment portfolios? It’s because early-stage investing has been the sandbox of institutions and the wealthy. These savvy investors allocate to VC to take advantage of the high-growth prospects of startups. It helps that they have the means to withstand the massive financial commitments and fees, the risks of betting on a small number of companies and the years of illiquidity.

No fair. Ordinary investors could also benefit from enhancing their equity holdings with exposure to companies outside the public realm. What if they could have both the exposure to gross returns of the venture capital universe and the daily liquidity of public stocks? One index solved for that back in 2012. The Thomson Reuters Venture Capital Index (TRVCI) uses private company data to identify the systematic drivers of performance in the VC world and then assembles a portfolio of publicly traded securities that replicate those drivers.

Only one mutual fund, the AXS Thomson Reuters Venture Capital Return Tracker Fund (LDVIX), tracks this index by holding what is in the portfolio. That means retail investors can circumvent the restrictions of traditional VC investments and add well-diversified exposure to the high growth potential of the VC space.

With so much of the innovation driving our economy coming from venture capital-backed companies, why can’t you find VC in most people’s investment portfolios? It’s because early-stage investing has been the sandbox of institutions and the wealthy. These savvy investors allocate to VC to take advantage of the high-growth prospects of startups. It helps that they have the means to withstand the massive financial commitments and fees, the risks of betting on a small number of companies and the years of illiquidity.

No fair. Ordinary investors could also benefit from enhancing their equity holdings with exposure to companies outside the public realm. What if they could have both the exposure to gross returns of the venture capital universe and the daily liquidity of public stocks? One index solved for that back in 2012. The Thomson Reuters Venture Capital Index (TRVCI) uses private company data to identify the systematic drivers of performance in the VC world and then assembles a portfolio of publicly traded securities that replicate those drivers.

Only one mutual fund, the AXS Thomson Reuters Venture Capital Return Tracker Fund (LDVIX), tracks this index by holding what is in the portfolio. That means retail investors can circumvent the restrictions of traditional VC investments and add well-diversified exposure to the high growth potential of the VC space.

(Silicon Valley)

Venture capital has always been a hard-to-access asset class for advisors and their clients. The funds tend to have high minimums and long lock-up periods with extremely low liquidity. That said, returns are historically strong, and VC can often be an un-correlated asset class whose returns are differentiated in scope and timing from publicly-traded markets. Because of the lack of liquidity and easy access it has been an asset class that has largely been overlooked by advisors and high net worth individuals. However, there are some ways to access venture capital through liquid funds which are likely worth a look.

FINSUM: Not only can returns because excellent and uncorrelated, but VC is likely to become a more important asset class in the next few years. Why? Because more and more large companies are staying private for longer, which means investors need to ways to access the asset class in order to participate in the total return of the market.