Core Viewpoint - Octopus AIM VCT 2 plc reported a decline in net asset value (NAV) and profit for the half-year ending 31 May 2025, amidst a challenging economic environment, but showed signs of cautious optimism for the AIM market and UK economy [4][5][18]. Financial Summary - Net assets decreased to £80.772 million from £83.409 million in the previous year [2]. - The company reported a loss after tax of £1.371 million compared to a profit of £5.464 million in the same period last year [2]. - NAV per share fell to 37.9p from 45.5p year-on-year [2]. - Total return per share was -2.0%, contrasting with a 6.3% return in the previous year [2]. - Dividends per share paid in the period were 1.8p, down from 5.4p in the previous year [2]. Market and Economic Context - The AIM market has shown resilience despite a complex economic landscape, with improving investor sentiment driven by expectations of interest rate cuts and stable inflation [4][6][15]. - Growth stocks remain out of favor, contributing to the company's NAV decline, which underperformed the AIM index that rose by 2.8% during the same period [5][18]. Investment Strategy and Portfolio - As of 31 May 2025, 13% of the company's net assets were invested in unquoted companies, up from 9.4% the previous year, indicating a strategic shift towards these investments [7]. - The company made four qualifying investments totaling £2.8 million, an increase from £2.5 million in the same period last year [21]. - Notable investments included Aurrigo International plc and RC Fornax plc, focusing on innovative sectors such as autonomous vehicles and defense [22][23]. Shareholder Returns and Dividends - The company declared an interim dividend of 1.8p per share, consistent with the previous year, to be paid on 27 November 2025 [11][49]. - A revised dividend policy will be introduced from the 2026 financial year, aiming for an annual dividend of 6% of the opening NAV per share [13][14]. Government Support and Regulatory Environment - The UK government reaffirmed its support for Venture Capital Trusts (VCTs) in recent statements, which is expected to enhance investment in innovative businesses [6][17]. - Proposed reforms to the VCT market include increasing investment limits and extending eligibility for companies, aimed at maintaining VCTs as vital funding sources [17].