Key Highlights

  • Oberon AIM VCT plc (LSE:OVCT) is listed on the London Stock Exchange Main Market with a Dividend Yield of 7.11%.
  • A final dividend of 1.35p per share for 2025 was approved at the AGM on 30 June 2026 and paid on 5 August 2026.
  • The trust aims to pay a 5% tax-free dividend on year-end NAV, subject to distributable reserves.
  • NAV per share rose 2.5% in 2025, with a total return of 7.5% including dividends.
  • NAV was 23.14p per share at 30 June 2026.
  • The portfolio holds over 40 small and medium-sized companies, mostly on AIM.

Overview of Oberon AIM VCT

Oberon AIM VCT plc (LSE:OVCT) is a Venture Capital trust that invests mainly in companies listed on the Alternative Investment Market. Managed by Oberon Investments, with Fund Manager Simon Like leading a team that includes Paul Sheehan and Richard Penny, it aims to deliver long-term capital growth alongside an attractive tax-free dividend.

The 7.11% yield reflects a dividend target of 5% of NAV and a share price below NAV.

Latest Results

For the year to 31 December 2025, Oberon AIM VCT's NAV per share increased 2.5%, producing a total return of 7.5% when the 1.3p dividend paid in the period is included. The board noted the portfolio's ability to generate value in a still-recovering AIM market, benefiting from well-managed, growth-oriented companies. NAV was 23.68p at 29 May 2026 and 23.14p at 30 June 2026.

Dividend Record

OVCT pays one annual dividend. It paid 2.5p in 2023 and 2024 and 1.3p in 2025, after the board aligned dividends with its 5% of NAV target. For 2025, the board proposed a final dividend of 1.35p, approved at the AGM on 30 June 2026 and paid on 5 August 2026. The board said a 5% tax-free yield equates to around 8.5% for a higher-rate taxpayer.

How the Dividend Is Funded

Dividends come from distributable reserves built from realised gains and income. Because AIM-focused VCTs depend on share price performance, dividends move with NAV.

Transparency

As a VCT investing mainly in AIM stocks, the portfolio is transparent and can be monitored daily, unlike VCTs focused on private companies.

AIM Market Backdrop

AIM has been weak for several years, with valuations near relative lows. Some sectors that performed well, such as oil and gas, are excluded from VCT investment. A recovery in AIM would boost NAV and dividends.

Why AIM VCTs Appeal

AIM-focused VCTs offer investors access to a diversified basket of growing smaller companies with the tax benefits of the VCT regime. Because holdings are listed, valuations reflect market prices rather than manager estimates, and investors can see exactly what the fund owns. The board believes the portfolio offers exposure to AIM at what appears to be near a relative low point in valuations, which could deliver strong returns if sentiment towards UK smaller companies improves.

Tax Benefits

Qualifying investors receive VCT dividends tax-free, and new subscriptions may attract income tax relief if held for the required period. For a higher-rate taxpayer, the board estimates that the 5% tax-free target is equivalent to a gross yield of around 8.5%.

Costs and Fund Size

With fewer than eight million shares in issue, OVCT is a small fund. Fixed costs weigh more heavily on small funds, so growing the asset base through performance and fundraising would improve efficiency. The board has acknowledged a temporary rise in costs while the manager invests in resources but expects a return to a downward trend once conditions stabilise.

Risks

Risks include continued AIM weakness, small company volatility, limited Liquidity and a small fund size. Dividends fall if NAV declines.

Market Sentiment

Directors have bought shares, including the chairman's purchase of 25,000 shares in May 2026, signalling confidence.

How OVCT Fits an Income Portfolio

OVCT suits tax-aware investors seeking exposure to AIM growth companies with a modest tax-free income.

Manager Resources

Oberon has devoted more resources to the fund, adding experienced managers from established asset managers.

Dividend Sustainability Scorecard

  • Target: 5% of year-end NAV.
  • Latest dividend: 1.35p, up from 1.3p.
  • NAV: 23.14p at 30 June 2026.
  • Portfolio: over 40 AIM companies.
  • Key risk: AIM volatility.

What Investors Should Watch

Watch monthly NAV updates, AIM market trends, directors' dealings and the next annual dividend proposal in 2027.

Is the 7.11% Yield Sustainable?

OVCT's dividend is sustainable under its 5% of NAV policy, though amounts depend on AIM performance. LSE:OVCT suits investors seeking tax-free income with AIM recovery potential.