AIM – Q2 review – what has gone wrong and what are the opportunities?

Watch our  webinar where we consider AIM in second quarter of 2022 – what are the opportunities? Where and why did things go wrong and when will things get back on track?

Join Fundamental Asset Management’s co-Founders Chris Boxall & Stephen Drabwell on Wednesday 20th July at 2pm as they look at what happened to AIM in the second quarter of the year.

They will review the second quarter and look into their crystal ball for the rest of 2022. What happened to AIM overall. Have all companies been performing badly? What is causing the issues?

– Quick refresher – what is AIM?
– Quick refresher – using AIM for IHT planning.
– What happened to the market in Q2 of 2022?
– What has gone wrong and why?
– What does the rest of 2022 have in store?
– Other times AIM has fallen.
– What are the opportunities?
– ESG & PRI developments.
– Questions.


To find out more about the benefits of investing in AIM, please speak to our Business Development Manager Jonathan Bramall via email [email protected]  or phone 01923 713 894


The Fundamentals #6 – How long do you need to hold a qualifying stock for it to receive IHT relief?

In the sixth of our series – The Fundamentals – about going back to the basics of investing in AIM shares for Inheritance Tax (IHT) planning purposes, we look at How long do you need to hold a qualifying stock for it to receive IHT relief?

We recently ran a webinar for financial advisers where we answered questions on How to use AIM for Inheritance Tax Planning? We received a number of questions regarding the length of time shares must be held to benefit from IHT relief. With the risk warning that we are not tax advisers as well as that tax benefits depend on circumstances and tax rules can change, we have put our understanding of the rules below.

What is the length of time a Business Relief (BR) qualifying stock must be held so a client’s estate does not need to pay Inheritance Tax?

  • A share (and any replacements) must have been held for at least a total of 2 years and still be held on death.
  • The company must still qualify for Business Relief at the time of the investor’s death.

Does the overall AIM portfolio need to be held for 2 years to claim BR or is it on a share by share basis?

  • It is on a share by share basis.

If a qualifying stock is sold and new qualifying stocks are purchased, does that reset the clock?

  • As long as the whole of the money from the sale of the stock is reinvested, the calendar does not reset.

Does HMRC publish a list of qualifying AIM stocks which, if held for 2 years, would qualify for IHT relief?

  • No, HMRC doesn’t produce a list but this is where using experts such as Fundamental Asset Management comes into play. Not only do we select stocks based on the qualifying criteria but we also keep them under review in case their Business Relief qualifying status changes. It is also worth noting that as well as the potential of saving 40% on IHT, our AIM for IHT portfolio service has seen historical growth that has outstripped other indices and competitors over many years.

For more information about reducing Inheritance Tax by using Business Relief click here.

If you have any questions, please do not hesitate to contact our Business Development Manager Jonathan Bramall via email [email protected] or phone 01923 713 894

The Fundamentals Series

Our Educational Webinars also provide plenty of further information.

Fundamental Asset Management


More AIM Success- but what are the drivers of return?

AIM continues to be the market of choice and the envy of growth markets around the world. It has comfortably outperformed London’s main market in all key areas during the Covid-19 crisis so far, one of the worst periods of economic uncertainty and downturn in our economic history. But where has its success derived?

The make-up of AIM has changed since it began back in 1995 when it was considered the wild west of investment markets. Today is a very different picture. AIM now has many businesses valued at over £1billion! Making up a significant share of the market’s overall capitalisation and a key driver of AIM’s overall return.

The two largest companies on AIM are ASOS and Boohoo and well-known online retailers. AIM has many highly profitable companies but at the other end of the spectrum it has some with no revenue or earnings to speak of. However, these are not laggards but some of the most exciting prospects for future growth covering sectors including hydrogen fuel cells and early-stage pharma.

AIM has become more of a rounded market, with many well-established businesses (some over 100 years old). But it is also a marketplace for many innovative and fast-moving business. AIM has a large exposure to some of the economy’s best-performing sectors, such as technology.

Interested in hearing more? Join us on Tuesday 29th June at 2pm for our session Is AIM heading for a fall…or is its outperformance set to continue?

The improving quality of companies on AIM, combined with the Individual Savings Account (ISA) rule changes from August 2013 which allowed AIM shares to be held within ISAs, has seen a growing number of investors consider AIM for both its investment and tax planning attractions. The ability to invest in inheritance tax (IHT) qualifying portfolios through many leading wrap platforms now makes it even easier for clients and advisers.

AIM is no longer the high-risk market of former times, where speculative resource stocks and unknown international companies proliferated. It is now home to a large number of well-managed, profitable, dividend yielding UK based business.

As the market has improved it has also become much easier for investors to buy and sell AIM shares and for advisers to offer access to these exciting companies to their clients, many of which come with attractive inheritance tax planning benefits.

The purchase and sale of AIM quoted securities often used to be the preserve of specialist brokers but AIM IHT Portfolios can now be accessed through leading wrap platforms. This means that, in allocating money to a specialist manager, advisers are not forced to direct money off platform, which can cause unnecessary monitoring and administrative burdens, not to mention a fear of the unknown. Advisers can keep everything in one place maintaining the same pricing structure.

Investing via platforms can also expedite investment without the need to complete lots of paperwork, which is particularly important for AIM for inheritance tax planning purposes with the short, two-year, qualifying period a key attraction.

Fundamental AIM IHT Portfolios can currently be accessed on the Transact, Elevate, SL Wrap, Funds Network, Ascentric and Nucleus platforms.

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.

To hear the many other ways BPR qualifying assets can help your clients’ Inheritance Tax planning watch our session How can AIM help you and your clients?

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.

Enjoy your weekend,

The Fundamental Asset Team


Should I Transfer my ISA?

It is not long until the end of this tax year. This is always a good time to sit down and assess your financial situation and evaluate your existing ISAs.

Many people consider switching their ISA provider due to poor performance or a lack of expert guidance and switches often occur towards the end of the tax year to make use of any remaining ISA allowances going in the new financial year.

Why should I transfer my ISA?

There are a few key reasons you might want to transfer an existing ISA between providers. These include:


Performance is key. If your ISA is not performing, it might be time to move it. Keep an eye on the performance of your provider relative to its peers and regularly weigh up whether better returns could be found elsewhere.

Performance over recent years would certainly have been enhanced if your ISA had been invested in AIM shares, with the FTSE AIM Index yet again massively outperforming the main UK stock market.  Our Blog here covered AIM’s outstanding performance in 2020.


This is another key factor when deciding who manages your ISA. It is important to compare the costs you are paying for your ISA against those you would be paying with another manager.


Not all wealth managers offer the same level of service. You might be looking for a provider who you can talk to directly when needed and not a call centre or mailbox. There are plenty of reasons you could be happier with a new provider.


Having your ISAs in one place can help you take advantage of fewer costs standalone costs for administration. It is also easier to keep track of your progress with everything under one roof.

Does transferring affect my ISA allowance and is there a limit on how much I can transfer?

Transferring an ISA to another provider will have no impact on your allowance for that tax year. The £20,000 limit is consistent across all providers and part of the transfer process includes sending your contribution history.

An ISA transfer lets you move money built up in previous years to a new provider without losing the tax-free status of that money. There is no limit on the amount or share of previous years ISA money that can be transferred. You can transfer all or part of it.

If you are transferring an ISA with contributions made in the current tax year, you will have to transfer the whole amount of those contributions. This is essentially to stop you having contributed to two separate ISAs of the same type within the same tax year.

How do I transfer an ISA?

Transferring an ISA is easier than you might think. Initiating an ISA transfer can be as easy as requesting it from your new provider. You will be asked to fill out a short form, which is then signed and sent back to the new provider. From there, they will liaise with your current provider to make the transfer happen.

ISA Transfer Form

You will need to complete this form before you are able to move your money. This may be a form that is included on their website, on a platform or they may be directly in touch with you to sort out the details.

Do not withdraw this money to move it. Doing this will void the tax-efficient status of your savings and it will count against your tax-free allowance if you choose to reinvest in an ISA. If you are transferring from one Stocks and Shares ISA to another, then you should have the option to move the investments you hold to your new provider without selling them. This is often called an ‘in specie’ or ‘re-registration’ transfer.


This is when your new provider moves the money away from your old provider. The process can take from 4-6 weeks but there is nothing for you to do here. Your new manager will manage this process on your behalf.

Transferring to an AIM ISA brings more than CGT and Income tax benefits. AIM shares also bring 100% mitigation from Inheritance Tax if held for two years and until death.


You can find out more about Fundamental Asset Management’s high performing AIM Inheritance Tax ISA portfolio, which has been delivering exceptional investment returns for more than 16 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.

Derek McLay

Business Development Manager

Fundamental Asset Management Ltd.


AIM for Inheritance Tax planning is not early stage investing

Many are attracted to invest in AIM for the Inheritance Tax planning attractions yet are fearful of the perceived extra risk of investing in smaller quoted companies and the notion that they will have their money locked up in early stage businesses.

While the vast majority of AIM companies are smaller than their peers on the main market, there are now many large companies on AIM, with nineteen valued at more than £1 billion each at the end of October. AIM’s largest company ASOS, which is valued at more than £4 billion, would gain it entry to the FTSE100 index of the UK’s largest companies.

Our philosophy for investing in AIM for Inheritance Tax planning purposes is to stick to well-established, proven and profitable businesses, many of which are often run by their founders who continue to own significant equity stakes. Our AIM for Inheritance Tax portfolios include several companies that have been controlled by the same founding families for several generations.

In eschewing small, early stage ventures, with unproven business models and negligible revenue, we may miss out on the occasional star performer, however, experience has also shown that we also avoid the numerous failures.

Investing in early stage companies requires a large degree of patience. New concepts and technologies take many years, and often decades, to come to commercial fruition. AIM previously attracted many small early stage business, often in the healthcare sector, some of which have seen great success over the pandemic. Rather than raise new capital via a listing on AIM, early stage companies now have access to start-up capital through venture capital, private equity or crowd funding routes. This means that new arrivals to AIM in recent years have largely been better-established businesses, the majority of which are revenue generating and profitable.

The primary attraction for those investing in AIM for Inheritance Tax planning purposes is often the short 2 year qualifying period for assets to fall outside the estate, following the Business Relief rules. Accordingly, while investing in equities should always be viewed as a long-term exercise (5 year plus), the window of investment opportunity for Inheritance Tax planning is somewhat shorter than would normally be the case.

Our webinar ‘The truth about risk in AIM’, highlights the more pertinent risks associated with investing in AIM for Inheritance Tax planning purposes. You can watch the webinar from the link here.


Chris Boxall

Cofounder & Co-Managing Director

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 16 years, from the link here.


Introducing our new Adviser Centre!

At Fundamental Asset, we understand the important role financial advisers play in helping clients make good financial decisions to achieve their goals. We feel it is our duty to support you in this which is why we have created our new Adviser Centre.

Our Adviser Centre is designed to make your life easier and has everything you need to manage and support your clients. This dedicated adviser area includes our educational webinar and literature libraries, client case studies and detailed insights. You can also build your own illustration, find details of your dedicated relationship manager and find links to all our third-party platform partners.

Here is a quick summary of some of the resources to help you as financial adviser:

Adviser Guides

We understand that AIM investing is one part of several areas where you support clients. Fundamental Asset are AIM specialists and we take it upon ourselves to support you by providing expert knowledge on everything you need to know about AIM. Our guides so far include Investing in AIM for Inheritance tax and how to discuss risk in AIM with clients. Keep an eye out for more specialist guides over the next few months.

Case Studies

Our library of case studies is designed to be short refresher guides covering various client scenarios where an AIM portfolio can help you and your clients. This may reinforce your understanding of where AIM can help your clients or it might help unlock an opportunity in your existing client base.

Build an Illustration

You can now build your own illustration on our website using our new illustration builder. This can include your adviser remuneration as well as our own management fees and any third-party platform fees. Give it a try!

Your Relationship Manager

We understand how important it is for you to have a direct line of communication with any investment manager managing money on behalf of your clients and we want to be as open and contactable to you as we can possibly be. As such, not only do you have a dedicated contact but you can even call directly into our cofounders and portfolio managers.

Educational Webinars

Every month we present an educational webinar on AIM to the adviser community. These include topics such as post-Covid opportunities in AIM, all you need to know about investing in AIM for IHT and even discussing risk in AIM with clients. All these sessions are available to watch on-demand through our online adviser centre. You can even register for any up-coming sessions here too!

Our Platform Partners

Platforms play an important part in most financial adviser business models by removing unnecessary risk, reducing time spent on administration and expanding investment options. We recognise this, and so we position our AIM Inheritance Tax ISA and AIM Inheritance Tax Portfolio service on many of the key adviser platforms in the UK. Have a look on our adviser centre to see if we are on your chosen platform.


We have even built a large database of frequently asked questions from advisers to help you get a quick answer to a common question.


Our Adviser Centre is designed to make life easier by helping you support and manage your client bank. Take a look! and let me know what you think.

Enjoy your weekend!

Derek Mclay

Business Development Manager

077437 25659/ [email protected]


Join me and the Fundamental Asset Team where we will be introducing our new Adviser Centre and discussing how AIM can help you and your clients.

Click the picture below to register for our session: How can AIM help you and your clients?

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 16 years, from the link here.


Sunak scraps the Budget – should AIM tax reliefs be enhanced?

The popular press had previously alluded to the potential withdrawal of Inheritance Tax/Business Relief on AIM shares. With Chancellor Sunak scrapping his autumn Budget, as he focuses on matters of more immediate concern to the economic welfare of the country, any adverse tax changes for holders of AIM shares therefore appear to be off the table for the time being.

As we have suggested before, the Chancellor may be more inclined to extend tax reliefs for those supporting smaller companies in an effort to unlock the considerable savings held by the wealthier members of the population, which are effectively being eroded due to inflation and the derisory interest available on savings accounts.

The poor returns generated by the main UK stock market over the last decade and the significant outperformance of AIM portfolios over this period also suggests that investors would have been far better off investing in smaller, faster growing companies on AIM, than many of the aged dinosaurs of the main market.

Numerous small AIM pharmaceutical and biotech groups have been at the forefront of developing tests and vaccines in the battle against Covid-19. This has not been possible without the support of their shareholders, many of whom have been encouraged to invest with the added attraction of various tax reliefs.

Specialist research house, Equity Development, previously highlighted the huge benefits AIM brings to the UK economy and how the mild encouragement provided by the Inheritance Tax concession to those considering an IPO onto AIM is a very large multiple of the cost in tax foregone by HMRC.

Equity Development considers AIM companies contributed over £33bn Gross Value Added (GVA) directly – over 40% more per employee than the national average – and just as much indirectly to the UK economy since their direct GVA has increased by 35% in the last five years, more than twice as fast as the average. Not only are AIM companies more productive than average, their productivity is growing – at 11% pa, significantly faster than average.

A report by Grant Thornton on AIM’s first 25 years shows that small companies listed on AIM perform ‘better’ – generating more added value, more employment and far greater tax receipts for HMRC – than comparable “private” companies.

AIM’s superior growth has, in just the last five years, added £4.7bn pa to UK economy and more than £1bn per annum to HMRC. Rishi, take note!

Many investors and advisers are fearful of the perceived extra risk of investing in AIM. Our forthcoming webinar ‘The Truth about Risk on AIM’ will cover this and other misconceptions about AIM.  You can register for the event by visiting the link here.

Not only is AIM of huge benefit to the UK economy but AIM listed companies represent the primary source of growth for UK small cap investors, reflected in the significant outperformance of AIM for IHT managers, including Fundamental, over the past decade or more.

Since launch on 19 June 1995, AIM has supported nearly four-thousand growth companies in raising over £117bn, 61% of which has been through follow-on fundraisings. The equity fund raisings over the pandemic have seen investors plough £billions into UK companies, removing a further burden from the government.  For the eight months to the end of August AIM companies have raised £3.6 billion of follow-on capital.

We reiterate our suggestions that, for a limited period, the UK government should actually consider enhancing the tax incentives for investing in the newly issued shares of UK listed companies, whatever their size, whether on the main market or AIM. Now that’s a radical thought!

Chris Boxall

Cofounder & Co-Director

Please join the Fundamental team at our webinar ‘The Truth about Risk in AIM’.

Click the picture below to register..

You can find out more about Fundamental Asset Management’s high performing AIM portfolio service, which has been delivering exceptional investment returns for more than 16 years, from the link here.


Common AIM Myths Debunked!

AIM is often considered a higher risk market due to the increased volatility, but does heightened volatility really amount to greater risk?

From our perspective the purest definition of risk is the likelihood of a permanent loss of capital and, over the last 10 years, AIM’s larger companies have been better at delivering capital growth to investors than their UK main market peers..

There are many misconceptions and myths surrounding AIM. Here’s the truth on some of these below..

Your Capital Risk is at risk in AIM.. This is true

Like other equity markets, AIM carries capital risk and AIM has had a few high profile failures, including Conviviality, Patisserie Valerie and Silverdell. However, these are rare cases and the quality of companies and AIM’s governance has improved considerably over recent years. Although it used to have a wild west reputation the reality is that AIM is now a much more stable market, worth just over £100bn.

AIM Shares are Illiquid.. myth

Many AIM shares are less liquid than the main large market stocks, however, many main market companies are also far less liquid than similar sized AIM stocks. The value of AIM shares traded in August 2020 was over £5 billion with AIM’s largest company seeing £587 million of shares traded. Unless you are a large retail investor (£100m+), an institutional investor, or forced to sell during market sell-offs, liquidity risk should not be an issue.

Concentration is an issue for AIM.. can be true

Concentration can be an issue for some large AIM investment managers as AIM is designed to be a market for smaller companies and those managing significant assets for clients will risk owning too much of a single company. However, for Fundamental Asset Management this is not a concern. We are large enough to take advantage of scale but small enough not to have any concentration worries.

AIM is unregulated? ..Fake News!

AIM was established as part of the London Stock Exchange in 1995 and is a regulated market, although not to the same extent as the main market. There are firm corporate governance rules in place, and a variety of procedures and checks for constituent companies to follow. AIM is subject to the UK Market Abuse Regime and the majority of companies are subject to the rules of the UK Takeover Panel and the Companies Act.

AIM has only young and high-risk companies? Fake News!

AIM was designed for younger companies but has been around for 25 years. Many of those early business grew over time and the average market capitalisation is now around £130m. In fact, 20 companies have a market cap of over £1bn and the overall market value was £107bn at the end of August. The wide range of companies across numerous sectors means that investors can pursue different investment strategies within AIM.

Tax is the only reason to invest in AIM? Fake News!

AIM is one of the most successful growth markets in the world. AIM stocks pay no stamp duty, can be held in an ISA and many AIM companies also qualify for relief from Inheritance Tax through the Business Relief.  The Numis Alternative Markets Index has returned 16.2% over the five years to 30 April 2020 (FTSE100 Index declined -4.9%), and dividends paid by AIM companies burst through the £1 billion mark for the first time in 2018. This makes for a much more enticing investment opportunity far beyond tax driven incentives.

Join me and the Fundamental Asset Team where we will be discussing more truths about risk in AIM.

Click the picture below to register for our session: The Truth about Risk in AIM

You can find out more about Fundamental Asset Management’s high performing AIM portfolio service, which has been delivering exceptional investment returns for more than 16 years, from the link here.


What is driving AIM’s outperformance?

The AIM index is up 30% since 1st April i.e. Q2 2020. Maybe this is not surprising when you consider that it fell by 29% in Q1 and, as has been widely reported in the mainstream press, markets have rebounded.

However, when you compare to the UK main markets, AIM has massively outperformed in Q2 with the FTSE 100 and FTSE All-Share up c10% and 11% respectively. And, it’s not if the main markets didn’t fall as much in the first quarter. The 100 was down 25% and the All-Share 26%.

So what is driving AIM?

Well, it is probably a number of factors.

Firstly, it has been well documented for some time that the FTSE 100 is full of pretty dull and uninspiring companies and that can partly explain why it has also underperformed the S&P500. The UK blue-chips did benefit last year from a weakening pound as overseas investors bought cheaper assets and yield. With Sterling still relatively weak, it appears that no longer remains an attraction.

However, that aside it is more likely that the dominance of a few underlying companies is distorting the index and this has always been the problem of using AIM as a comparative index.

There were 831 companies listed on AIM at the end of May 2020, with the combined market capitalisation of the market c£95.3bn. There were 17 companies individually valued at more than £1bn, which between them represented 34% of the total market capitalisation.

With AIM being a weighted index, i.e. the return of the index is based on a weighted return by market capitalisation, rather than each company being weighted equally as the US Dow Jones is for example, it is fair to say that those 18 companies will really move the needle.

And if we look into some of those companies, you will see the influence they have.

Probably two of the most well known companies listed on AIM are online clothing retailers Boohoo and ASOS. Boohoo, with a market cap of c£5bn is comfortably the largest company on AIM by value, being £1.5bn more than the next on the list, Abcam.

Combined, these companies represent over 8% of the index. When you consider that ASOS is up 177% in this quarter alone and Boohoo 115%, returning to pre -lockdown levels, you can see the influence they are having on the index as a whole. ITM Power, another £1bn+ company is also up over 100% quarter to date.

Unless you are holding these companies in your portfolio, it is very likely that your AIM portfolio is going to be significantly underperforming the AIM index.

So although the AIM index has been a better indicator for AIM portfolios in recent years, it goes to show that it can be misleading in extraordinary times.

You can find out more about Fundamental’s high performing AIM portfolio service, including the latest fact sheet for May, from the link here.