Fundamental Asset Management was recently featured in What Investment after our decision to broaden our investment mandate and introduce positive & sustainable growth into our AIM IHT portfolio. (Read the full article here).

There are two improvements this brings. Firstly, it widens our remit and therefore our opportunity for growth. And secondly, it allows us to create a dedicated positive & sustainable version of our AIM IHT portfolio for clients that require this type of mandate (subject to a minimum).

The opportunity for growth

It’s important to understand that this is not a change of the management style of our successful AIM for IHT portfolio service which has recently had its top quartile performance over 1,3,5 & 10 years confirmed by MICAP (Read the full report here). Instead, it is a broadening of our investment remit to take advantage of the growth opportunity which positive and sustainable investing presents.

There are many examples of the opportunities to be found here including within healthcare, energy storage and renewables. We have, up to now, avoided earlier stage, smaller, non-profitable companies in these sectors, due to the perceived heightened risk of these types of business. However, these types of ‘new economy’ businesses have performed strongly over recent years, have attracted significant amounts of capital and are therefore well-funded to commercialisation. Importantly, we consider that investors’ enthusiasm for supporting more innovative companies in fast growing sectors may continue to deliver outperformance.

We should emphasise that companies of this nature will only form a very small component of IHT portfolios, sitting within our ‘satellite’ basket of holdings, which typically represents approximately 20% of the overall portfolio and where individual stock holdings are approximately 2% in size on inception. The average market capitalisation of our AIM IHT portfolio holdings is currently in excess of £700m and we anticipate that this will remain the case.

Positive & sustainable AIM IHT portfolio

From discussions with clients and advisers we see a growing enthusiasm for supporting companies making a positive commitment to society. We agree with this principle and the decision to broaden our investment mandate to include earlier stage, smaller, non-profitable businesses showing positive and sustainable change gives us the flexibility to invest line with these principles.

If you have a client who is looking to mitigate an Inheritance Tax issue but who also has ethical principles to consider then a bespoke positive and sustainable AIM IHT portfolio could help. Please Contact us to discuss further.

You can hear more about AIM and ethical investing from our webinar recordings: ESG & AIM – do they mix? And Positive & sustainable growth in AIM for IHT.

The Fundamental AIM IHT Portfolio is a discretionary investment management service where clients can obtain 100% mitigation from Inheritance Tax, benefit from the capital growth afforded by the AIM market and retain control of their assets.

You can find out more about Fundamental Asset Management’s high performing AIM IHT ISA and AIM Inheritance Tax portfolio service, which has been delivering exceptional investment returns for more than 17 years, from the link here.

Read the What Investment coverage of Fundamental Asset Management’s recent decision to broadening its investment mandate and introduce positive & sustainable growth into its AIM IHT portfolio. (Read the full article here)

Chris Boxall, co-founder & co-managing director at Fundamental Asset has said: “this is an inevitable evolution of our successful AIM for IHT portfolio service. We recognise the opportunity for growth which positive and sustainable early-stage investing presents, while also supporting those businesses executing positive change”.

Rather than avoiding companies which do not meet typical ESG criteria, Fundamental wants to support those businesses executing positive change in their respective industries.

For example, many of AIM’s healthcare related companies have come to fore over the pandemic, whether in the area of testing or drug development. There has also been growing interest in the alternative energy arena, notably the hydrogen economy, as well as environmental matters in general.

The Fundamental’s AIM IHT portfolios have, up to now, avoided earlier stage, smaller, non-profitable companies in these sectors, due to the perceived heightened risk of these types of business for an IHT planning mandate. However, from discussions with clients and advisers they see a growing enthusiasm for supporting companies making a positive commitment to society, despite the majority of such businesses not having yet achieved profitability.

Fundamental Asset will continue to adopt their proven core/satellite approach to portfolio construction, but will increasingly consider investing small elements of the satellite basket in smaller, fast-growing, earlier stage companies.

While there is clearly perceived added risk investing in companies which are potentially in need of further capital injections to commercialise their product or service, the nature of markets has seen these types of ‘new economy’ businesses perform strongly over recent years and attract significant amounts of capital. We consider that investors’ enthusiasm for supporting more innovative companies in fast growing sectors may continue to deliver outperformance.

Enjoy your weekend,

The Fundamental Asset Team

You can find out more about Fundamental Asset Management’s high performing AIM IHT ISA and AIM Inheritance Tax portfolio service, which has been delivering exceptional investment returns for more than 17 years, from the link here.

Third-party due diligence provider MICAP have recently released their report for the Fundamental Asset AIM IHT portfolio for year 2020/2021. We are pleased to announce that we continue to lead the way on performance with a top quartile position over 1, 3, 5 & 10 years! Read the full report here.

Against all apparent and previously established logic London’s AIM market for smaller growing companies has comfortably outperformed London’s main market in all key areas during the Covid-19 period so far, one of the worst periods of economic uncertainty and downturn in our economic history.

The AIM All-Share index rose 26% between the end of January 2020 and the end of March 2021, while the FTSE All-Share Index fell -7.8%.

Also, in 2020 AIM saw a -27% fall in the number of companies leaving the market bringing the total to 55. However, the number of companies de-listing on the FTSE All-Share, rose 8% to 53, with some of those joining AIM.

On top of that, money raised by new companies joining the main market fell -19% to £2.5bn, while AIM only saw a decline of -1% from £496m to £489m.

Our associated online investment magazine Investor’s Champion covers all the new arrivals to AIM. April’s new arrivals are covered in the Blog here.

But why such a difference? Well AIM by its nature is a marketplace for many innovative and fast-moving business which are better positioned to adapt quickly. AIM also has a large exposure to some of the economy’s best-performing sectors, such as technology. The main market on the other hand has been pulled down by more established and slow-moving businesses with some in struggling sectors in the pandemic such as oil, banking and housebuilding.

The main market is yet to reach its pre-pandemic level. In contrast, AIM keeps its place as one of the most successful growth markets in the world and continues to prosper and generate enviable returns for investors.

Enjoy your weekend,

The Fundamental Asset Team

You can find out more about Fundamental Asset Management’s high performing AIM IHT ISA and AIM Inheritance Tax portfolio service, which has been delivering exceptional investment returns for more than 17 years, from the link here. We also have an Adviser Centre with a wealth of information to support financial advisers including case studies, adviser webinars, guides and platform partners.

Third-party due diligence provider MICAP have recently released their report for the Fundamental Asset AIM IHT portfolio for year 2020/2021. We’re pleased to announce that we continue to lead the way on performance with a top quartile position over 1, 3, 5 & 10 years!

Read the report here.