The AIM Dividend Monitor from Link Group suggests the total dividend payout from AIM companies will reach £1.22bn in 2022, which will be close to the record payout of £1.29 billion in 2019. Our assessment suggests that dividend payments may actually exceed this level.
Rising dividend yields
The strong rebound in dividend payments has coincided with a steep decline in the share prices of many AIM companies with the result that dividend yields of sizeable and well-established AIM companies have risen substantially, to levels not seen in the 18 years we have been managing AIM portfolios.
New AIM IHT Income Portfolio
We have been contemplating the launch of an income focused AIM IHT service for several months following discussion with advisers and clients. The quality of companies on AIM has improved considerably over recent years making this a far more viable AIM IHT planning solution than was previously the case.
Fundamental Asset Management’s new AIM IHT Income Portfolio will follow a fixed model, with equal investment in the shares of 30 Inheritance Tax qualifying AIM companies, well-diversified across sectors and industries. The current estimated forecast dividend yield from the portfolio is 5.25% (December 2022).
There is currently minimal cross-over with stocks in our long-running AIM IHT Growth portfolio. The average market capitalisation of stocks in the AIM IHT Income Portfolio is £269m compared with an average market capitalisation of £565m for the AIM IHT Growth portfolio.
Chris Boxall, co-founder of Fundamental comments:
“Up to now, our predominant focus when investing in AIM is on capital growth. However, our research has uncovered a large number of sizeable AIM companies, previously considered for their growth prospects, now offering compelling dividend yields. When we looked at this many years ago, higher-yielding AIM companies were firmly ex-growth and subscale, however, this is no-longer the case”.
The new Fundamental AIM IHT Income Portfolio is available on Fundamental’s own designated broker platform or via a range of IFA wrap platforms including Abrdn (formerly Standard Life) Wrap & Elevate, Fidelity Funds Network, Nucleus, Transact, M&G Wealth and others. It is available in both an ISA and General Investment Account.
You can find out more about our AIM IHT Income Portfolio in our webinar here and video interview here.
To find out more about the benefits of investing in AIM, or if you wish to discuss the current situation, please speak to our Business Development Manager, Jonathan Bramall, via email [email protected] or phone 01923 713 894.