Professional Connection Newsletter

13th February 2008

Welcome, to the first Cockburn Lucas Professional Connection Newsletter of 2008. In this edition, there are 2 themes. Firstly, timely investments to be made following the changes made to capital gains tax (covered in our last newsletter). Secondly, our recommendations for investments to weather the current storm and protect your client's wealth from the continued volatility in the markets.

We hope you enjoy our latest missive and as always for further details on any of the articles please contact us on:

Telephone: 0115 9476005. Website: cockburnlucas.co.uk E-mail: tr@cockburnlucas.co.uk

Capital Gains Tax Rollover Relief

We would like to introduce you to the Edge EIS, a capital gains tax rollover relief scheme. As the new changes to the CGT regime take effect this unique product structure should appeal to any of your clients who have realized a gain from the sale of a business, property or land or any other assets within the last 3 years. This product allows them to claim rollover relief with the added benefit of IHT relief after a two year holding period. Even better still, the fund is designed to be 'protected' and therefore underpins the capital invested at the end of a 3 year period. What is the downside? Well, with a capacity of only £10million this product will sell fast and only be available on a first come first served basis.

Contact us for further information on Edge EIS product for you or your clients.

Why Venture Capital Trusts are still a good option.

For several years now we have been big fans of Venture Capital Trusts for the capital gains tax mitigation they offer as well the growth potential of the invested funds. However, there have been some major changes to the rules governing VCT's recently.

The size of company in which they can invest has reduced from £16million capitilisation to £7million. The tax relief available for individuals investing in VCT's has reduced from 40% to 30%. The qualifying holding period for the investments has increased from 3 years to 5. You could, therefore, be forgiven for thinking that this perhaps will call time on the golden period for VCT investment.

Well, not quite. A number of funds that qualify under the 'old rules' are offering investors the opportunities to 'top up' and are raising cash before the end of the tax year which will allow new investors access to existing portfolios with existing track records. This therefore reduces the risk of the investment whilst also providing a nice stream of tax free dividends and no CGT on final disposal.

Over the last few years, we have invested in a range of VCT's on behalf of our clients including green/environmentally focussed funds as well as the long established market leaders.

If you think that VCT's may be appropriate for any of your clients and would like to discuss further please let us know.

Diversification is what you need!

Unless you have been hiding in a cave you cannot have failed to notice that stock markets have been suffering a little recently.

But guess what...? We believe we have a pretty good way of beating the new year financial blues.

All of our investments are monitored on an 'abosolute return' basis meaning that they judged not on their their performance relative to the market but on the overall returns they yield. The key to positive absolute returns is the diversification of investments and assets choices. As many of you will already be aware we are diversification junkies! And so we are delighted with the Cazenove Multi-Manager Diversity Fund.

Since october the FTSE 100 All share has dropped by 11% and even many cautious managed funds have dropped 4-5%. Meanwhile the Cazenove Multi-Manager Diversity Fund has managed to maintain equilibrium giving considerable weight to the argument that diversification is what you need and, to borrow from Rudyard Kipling, is a good way to 'Keep your head while all those around you are losing theirs'.

Fund factsheet availble here http://factsheets.financialexpress.net/cazi/KR23.pdf

If you would like to know more about this fund or other ways in which we can protect your clients money during these turbulent times please contact us.

 For more examples of successful diversified funds please visit our Investor Update section.

The talk of the town, at present, is of commodities and resource stocks. But for many the idea of betting the family ranch on the outcome of lean pork belly futures or frozen orange juice does not appeal. Nevertheless, we believe that commodities as an asset class would be a significant and important addition to any investors portfolio in terms of both risk management and performance.

Hitherto, accessing commodities has been the preserve of the institutions and the most private of private banks. Or at least, that was until we decided to do something about it and helped design and seed the i-funds ETF Commodity Fund.

Suffice to say, our efforts have been rewarded.

We believe that for any investment portfolio, be it general savings, pension or trusts this asset class nearly always warrants inclusion and we now have the tools to do it.

Fund factsheet available here.

If you feel the investment strategies of some of your Trusts could do with a review especially given the current market conditions then we would be delighted to carry out a free review for you under our Trust Review Service.

P.S. That's 'free and no obligation' but please excuse the cliche!

Cockburn Lucas.

Telephone: 0115 9476005. Website: cockburnlucas.co.uk E-mail: tr@cockburnlucas.co.uk

The views/opinions expressed in this newsletter do not constitute personal advice or a recommendation - it is important to seek independent financial advice.

Cockburn Lucas Independent Financial Consulting Limited. Authorised & regulated by the Financial Services Authority. Registered address Milton Chambers, 19 Milton Street, Nottingham NG1 3EU. Registered Number: 3365186

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