Fundamental AIM IHT portfolio update

Since hitting a high at the beginning of September, when its valuation touched £150 billion, the AIM market has struggled to make any progress, with the latest discovery of a new Covid-19 variant also pushing stocks lower across the board.

Some of AIM’s larger and more richly valued companies have been particularly weak over recent months as investors have been tempted to lock in profits after a very strong bounce from the lows of 2020 and the realisation that the short term could still prove challenging. Indeed, having benefited from a relatively benign environment of government support and shareholder forgiveness over much of the pandemic, we have started to see a more normal reaction to profit warnings from investors, with some significant share price sell-offs. Even those reporting what appear to be excellent results (which thankfully applies to many of our portfolio holdings) have seen their shares slide, with investors demanding ever greater returns and growth from the richly valued.

We have been investing in AIM for Inheritance Tax planning purposes since 2004 and experienced numerous different market conditions over this period.

Stock markets occasionally need to take breather and AIM’s recent underperformance relative to the main UK stock market comes as no surprise to us following a period of exceptional outperformance in 2020 and the beginning of 2021.

At times like this, when share prices are tumbling, for no stock specific reason, it’s often tempting to start re-shuffling portfolios, manically trading in search of the next great potential opportunity. However, our experience over the past 17 years has suggested doing nothing is generally the best course of action.

We question the logic of selling out of a high-quality company with strong long-term growth prospects, to reinvest in a lesser business with more modest prospects, simply on marginal valuation grounds. Experience has shown that high-quality smaller companies are more highly valued for good reason and, unless there is a fundamental change in their long-term growth prospects, it’s worth sticking with them.

Nevertheless, we have sold out of one core holding in the period following a disappointing trading update and our reassessment of its long term potential.

Please have a look at some of our educational webinars, which can be found here and expand on our investing philosophy and the reality of investing in AIM for Inheritance Tax planning purposes, notably during turbulent stock markets.

Our webinar from August 2020 ‘All you need to know about investing in AIM for Inheritance tax’ covers the basics of our AIM IHT portfolios.

Of more relevance to the current market, our webinar from 30 September 2020 ‘The Truth about Risk in AIM’ clarifies how we manage risk.

If you would like to discuss our AIM IHT portfolios please call us on 01923 713890 or email [email protected]


AIM: opportunities arise as liquidity and M&A surge

The AIM market has seen liquidity soar in the last year by almost 50%. Furthermore, the value of M&A deals have jumped over 150% to £8.4 billion between 2020 and 2021.

But what’s behind the rise in activity on the AIM market?

IGTV’s Jeremy Naylor discusses this with Chris Boxall from Fundamental Asset Management in their latest podcast.

Watch by clicking the image above.

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.