Displaying items by tag: thomson reuters

Thursday, 19 August 2021 18:11

Someone’s Figured Out Venture Capital

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.

Published in Alternatives

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