Investors look to VC in response to stock market decline
It’s no secret that the stock market is in a slump right now. For months, volatility has taken a toll on even the most well-established companies.
Goldman Sachs recently lowered its price target for the S&P 500 for the third time this year, citing concerns that a recession could cause the stock market to fall another 11%. Surging interest rates, public market volatility, and a possible recession all point towards investors seeking to diversify their portfolios with assets uncorrelated to public markets.
Investing today is tricky business
At current inflationary levels, few asset classes are likely to go up in real terms – even holding cash will effectively lose you 9% a year. Portfolio diversification is key to mitigating risk, and to position yourself to benefit from any market rebound. A great way to diversify your portfolio is to invest in start-ups, benefitting from the long-term upside provided by investing alongside the experts via venture capital funds, previously inaccessible.
Venture capital outperformed the FTSE all-share index every year since 2000 and allows you to diversify your portfolio, relying on professional fund managers in a high-performing asset class that is uncorrelated with public markets (according to research by Invesco and AngelList). There’s a reason venture capital funds are part of most institutional investors’ portfolios (a First Republic survey showed that 87% of Family Offices allocate into venture capital) – they provide serious investors a longer-term investment horizon that is less susceptible to short-term fluctuations.
Despite the benefits, venture capital is still not part of many people’s investment portfolios due to prior inaccessibility and high minimum ticket requirements, often in excess of £1m.
Sprout is changing this. We’re levelling the playing field, providing serious investors access to this top-performing asset class.
How does it work?
With your money professionally invested by seasoned fund managers, you can diversify your portfolio and back the game-changing businesses of tomorrow in just a few clicks and monitor it all online.
Sprout gives you the access you deserve. Sign up today and browse a selection of top-tier VC funds.
Capital at risk.