Core Insights - The Vanguard Long-Term Corporate Bond ETF (VCLT) offers lower costs and higher yields compared to the iShares 20 Year Treasury Bond ETF (TLT), which provides greater scale and pure exposure to U.S. Treasuries [1][9] Group 1: Fund Characteristics - TLT focuses exclusively on U.S. Treasuries with maturities over 20 years, while VCLT invests in a diverse range of investment-grade corporate bonds with maturities between 10 and 25 years [2] - VCLT has an expense ratio of 0.03%, significantly lower than TLT's 0.15%, making it more cost-efficient [3][4] - VCLT's dividend yield is 5.4%, compared to TLT's 4.4%, appealing to income-focused investors [3][4] Group 2: Performance and Risk - Over the past year, TLT has returned -4.0%, while VCLT has returned -1.6% [3] - The maximum drawdown over five years for TLT is -45.06%, whereas VCLT's is -34.31%, indicating VCLT's relative resilience [5] - The growth of $1,000 invested over five years would yield $564 for TLT and $695 for VCLT, showcasing VCLT's better performance [5] Group 3: Portfolio Composition - VCLT holds 257 securities across various sectors, including healthcare (14%) and financial services (13%), and applies an ESG screen [6] - TLT consists entirely of U.S. Treasury bonds with 100% of its assets in cash and government debt, making it less exposed to corporate credit risk [7] Group 4: Investment Considerations - Investors must choose between the financial security of U.S. Treasuries offered by TLT and the lower cost and higher yield of corporate bonds from VCLT, with the latter carrying higher credit risk [10][11]

Financial Highlights - The company reported a Net Asset Value Total Return of 0.4% for the period ended 30 June 2025, with a dividend yield of 6.4% [2][9] - The Net Asset Value per share decreased by 5.3% from 54.5p as at 31 December 2024 to 51.6p as at 30 June 2025 [9][67] - A special dividend of 3.1p per share was paid on 16 May 2025, returning £9.8 million to shareholders [6][15] Economic Context - The UK economy grew by 0.7% in the first quarter of 2025, but faced two consecutive monthly contractions in April and May, leading to flat overall growth [3] - Inflation rose from around 3.0% in January to 3.8% in August, driven by higher food and clothing prices, which may slow further interest rate cuts by the Bank of England [3][4] - The domestic economic landscape is challenging due to slow growth and tax increases affecting small businesses and the labor market [4] Investment Activity - The company fully exited its investment in Hospital Services Group Limited, realizing gains of £7.6 million, with total proceeds of £9.3 million [6][11] - One new investment of £1.5 million and six follow-on investments totaling £4.8 million were made during the period [6][28] - The investment portfolio's value fell by £1.5 million, primarily due to an investment sale and loan repayment totaling £8.9 million, partially offset by new investments and an increase in valuations [6][25] Portfolio Overview - As of 30 June 2025, the company's portfolio comprised 45 investments with a total cost of £79.5 million and a valuation of £107.7 million [24] - The company has a strong pipeline of potential investments sourced through regional networks and relationships with advisers and the SME community [13][45] - The company maintains a balanced strategy, targeting companies from various sectors and stages of maturity to mitigate market volatility [48] Dividends and Share Buybacks - An interim dividend of 2.8p per share was paid on 18 July 2025, returning £8.8 million to shareholders [6][15] - The company achieved an average discount of 5.0% across all buybacks during the period [17] Outlook - The business environment remains challenging with slow growth, persistent inflation, and geopolitical uncertainties [21][52] - The company is confident in its diverse portfolio and the ability of its manager to navigate the current economic climate [23][54] - Future volatility is expected, but lower tariffs and falling interest rates may enhance the UK's attractiveness for business [53]