Recent research has provided compelling evidence that within each tax year, early ISA (Individual Savings Account) investors significantly outperform those who invest in their ISA later in the tax year.

THE POWER OF DAY ONE INVESTMENTS
New data is clear; early investments in ISAs significantly outperform according to recent research from Hargreaves Lansdown. The research looked at a decade of investing clearly showed, individuals who maximised their ISA allowance on the first day of the tax year every year have seen their investments soar to a superb £360,500.

PROCRASTINATION COSTS RETURNS
In contrast, those who waited to invest until the last day of the tax year, accumulated a lesser £322,500. The substantial difference, highlighting the cost of delay.

TIMING MATTERS
The conclusion from the research was unequivocal: timing matters. By investing early, you’re putting your money to work sooner, capitalising on a full year’s worth of potential growth. As we embark into the new tax year, let’s keep this lesson in mind and wherever possible be the early birds of the ISA world.

HOW HAS THE MARKET BEEN?
With the research in mind, it is also a good time to review what the market did in the 1st Quarter of 2024. Join us for our next free webinar on Wednesday 24th April at 3pm “Q1 REVIEW – WHAT HAPPENED TO AIM?” Click here to register. The webinar is CPD eligible. Submit your questions to [email protected]

THE PROFESSIONAL INVESTOR PODCAST – EPISODE 2
In Episode 2 of The Professional Investor Podcast; Fundamental Asset Management’s Chris Boxall explains how a professional investor constructs an investment portfolio (which could be held in an ISA). Listen to it here or subscribe wherever you get your podcasts so you don’t miss a future episode.

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

The Professional Investor is a podcast series which goes inside the mind of a UK based professional investor. It explores; the secrets of asset management, gives the inside scoop on the latest developments from the front line of the investment industry as well as analysis and opinion on what is going on in the economy.

In Episode 2 of The Professional Investor Podcast; Chris Boxall will explore how a professional investor constructs an investment portfolio. Chris is co-founder and portfolio manager at Fundamental Asset Management.

Chris will talk about:

• His strategic investment approach
• Risk
• Research
• The key criteria he looks for in a company
• His strategy around diversification – including a sector he stays away from
• Some of the challenges there are in the market at present

Links & Resources:

Chris Boxall on LinkedIn

Fundamental Asset Management on LinkedIn

Follow Fundamental Asset on Twitter

Fundamental education webinars

Disclaimer: This podcast, all opinions and information are for educational purposes only and do not constitute investment advice. Trading and investing carries a high level of risk and are not right for everyone. If you need financial advice, consult with a regulated financial adviser in your country before making any decisions.

FURTHER INFORMATION

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

You can find out more about AIM ISAs here: ‘AIM ISA Explained’.

Fundamental now offers its standard AIM IHT Growth Portfolio, as well as its newer AIM IHT Income Portfolio service.

All portfolios are managed by the same team of managers and researchers that have delivered exceptional returns since the firm’s founding in 2004.

You can find out more from the link here or by contacting [email protected] or calling 01923 713894.

The Professional Investor is a new podcast series which goes inside the mind of a UK based professional investor. It explores; the secrets of asset management, gives the inside scoop on the latest developments from the front line of the investment industry as well as analysis and opinion on what is going on in the economy.

For Episode 1 of The Professional Investor Podcast; the professional investor is Chris Boxall. Chris is co-founder and portfolio manager at Fundamental Asset Management.

Chris gives his opinion on the Budget and explains some of the changes he would like to see at the London Stock Exchange.

Chris has 25 years as a professional investor under his belt having worked in New York as well as the UK. Back in 2004, Chris and his colleague Stephen Drabwell brought an American approach to investing over to the UK when they founded Fundamental Asset Management. The firm as well as managing general portfolios, has a focus on smaller companies on AIM including running a specialist AIM for Inheritance Tax Portfolio Service. Chris is the long term editor of the popular research site Investor’s Champion.

Key topics:
• The Budget
• The London Stock Exchange
• The Financial Times coverage of Chris’ recommendations

Webinar: “How Do You Use AIM For Inheritance Tax Planning?”

Previous Fundamental education webinars

Follow Fundamental Asset on Twitter

Chris Boxall on LinkedIn

Fundamental Asset Management on LinkedIn

Disclaimer: This podcast, all opinions and information are for educational purposes only and do not constitute investment advice. Trading and investing carries a high level of risk and are not right for everyone. If you need financial advice, consult with a regulated financial adviser in your country before making any decisions.

FURTHER INFORMATION

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

You can find out more about AIM ISAs here: ‘AIM ISA Explained’.

Fundamental now offers its standard AIM IHT Growth Portfolio, as well as its newer AIM IHT Income Portfolio service.

All portfolios are managed by the same team of managers and researchers that have delivered exceptional returns since the firm’s founding in 2004.

You can find out more from the link here or by contacting [email protected] or calling 01923 713894.

With ISA season 2024 upon us and people looking to do more with their money; a “Bed and ISA” could be just the ticket. We look at what it is and how it can help with Inheritance Tax (IHT) Planning.

A Bed and ISA transfer is a process in which a client moves their non-ISA investments into an ISA. The term “Bed” refers to the process of selling the investments and then using the proceeds from the sale to purchase equivalent investments within the ISA. This transfer enables clients to take advantage of the tax benefits provided by an ISA, such as tax-free income and capital gains. On top of this; when using a service such as Fundamental Asset Management’s AIM IHT portfolio service, the ISA can also be used to reduce IHT.

Fundamental Asset Management’s AIM IHT portfolio service is designed to deliver 100% IHT relief on the investment by purchasing Business Relief qualifying AIM shares on behalf of a client. For the client’s investment to qualify, the following is necessary:

1) qualifying shares must be held for at least two years and still be held on death;
and
2) the company must still qualify for Business Relief at the time of the investor’s death

Another advantage of a Bed and ISA transfer is that it can help investors simplify their investment portfolio. By consolidating their investments within an ISA, investors can reduce the number of accounts they need to manage and keep track of. This can save time and effort and make it easier to monitor the performance of their investments.

Overall, a Bed and ISA can be a useful tool for clients who want to take advantage of the tax benefits offered by an ISA while combining this with investing through an AIM IHT portfolio service, has additional IHT planning benefits.

ISA ACCOUNT DEADLINE FOR FUNDAMENTAL

Existing clients: 5th April.
New clients: 2nd April at the latest (assuming all information needed has been provided).

We spoke about Bed and ISA transfers in a past webinar which can be watched here.

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

Despite many articles in the press in the run-up to today’s Autumn Statement, Inheritance Tax (IHT) was neither scrapped nor were thresholds changed.

With figures this week showing that the Treasury is on course to secure a record IHT take this year; if you want to save your family money on IHT when you pass away, you can use Business Relief by investing in qualifying AIM stocks.

What this means is if you buy and hold shares in such companies, you could potentially pass on those shares IHT free provided that:

• the shares are held for at least two years and are still held on death
• the company still qualifies for BPR at the time of the investor’s death

You could buy as few or as many shares as you wish. There is no upper limit or allowance. Provided the above conditions are met, the whole value of the investment – be it £10,000 or £10 million – should attract 100% IHT relief.

For those already invested, say it quietly, but we may have started to see the markets taking a tentative step towards turning the corner after a torrid time; however, “one swallow does not a summer make”.

As we know from back in 2020, the nature of AIM is such that large loses can be made up quickly – early that year saw falls in AIM of around 30% before ending the year with a rise of around 20%. Whether we are at the turning point in the market remains to be seen but the issue when it does move, is it can move very quickly, and with liquidity being limited, it means those invested, could end up being the only people who can take advantage of an invigorated market whenever it arrives.

AIM IN 2023: CHALLENGES AND OPPORTUNITIES

In a recent interview with IG’s Jeremey Naylor, Chris Boxall, co-founder of specialist investment manager Fundamental Asset Management, discusses AIM’s challenges in 2023 and suggests what prospective investors should be looking for in the current environment and also what they should expect, when investing in AIM and smaller quoted companies.

You can watch the interview by clicking here.

Companies discussed include AB Dynamics, CVS Group, Jet2 and RWS Holdings.

FURTHER INFORMATION

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

You can find out more about AIM ISAs here: ‘AIM ISA Explained’.

Fundamental now offers its standard AIM IHT Growth Portfolio, as well as its newer AIM IHT Income Portfolio service.

All portfolios are managed by the same team of managers and researchers that have delivered exceptional returns since the firm’s founding in 2004.

You can find out more from the link here or by contacting [email protected] or calling 01923 713894.

The latest data released by HMRC shows receipts for Inheritance Tax (IHT) has gone up while Stamp Duty receipts have declined. For the period of April 2023 to September 2023, IHT receipts have surged to £3.9 billion, marking a £400 million increase from the same period last year.

This rise can be attributed to the freezing of tax thresholds over the years, dragging more families into the IHT bracket. The requirement to pay IHT within six months after a person’s death poses a challenge, especially when the primary asset, such as a house, needs to be sold to cover the tax liability. Delays in the probate process and the current market conditions mean that individuals might incur interest charges until the property is sold.

Additionally, Stamp Duty receipts for the same period have experienced a significant decline, totalling £7.7 billion, which is £3.0 billion lower than the previous year. This drop is attributed to the slowing housing market which has seen house prices falling. The prevailing cost-of-living crisis and high mortgage rates indicate that there might not be a substantial improvement in the immediate future.

The interplay of frozen tax thresholds, delayed probate processes, and fluctuating housing market conditions underscores the challenges faced by individuals and families dealing with Inheritance Tax which is so often affected by property ownership. These factors create uncertainties, with families struggling to navigate the intricacies of estate management and tax payments amid these challenging times.

An established strategy for individuals concerned about IHT is using AIM listed companies which are eligible for Business Relief to reduce their potential liability. The easiest way to do this is using an AIM specialist firm that specialises in investing in AIM for IHT planning. For more information click here. Existing ISAs can also be transferred; keeping the ISA allowance while taking advantage of the Business Relief to reduce IHT potential liability.

You can find out more about AIM ISAs here: ‘AIM ISA Explained’.

FURTHER INFORMATION
If you or your clients would like to speak to one of our portfolio managers, please contact Business Development Manager, Jonathan Bramall at [email protected] or on 01923 713 894

It’s 10 years since ISAs were allowed to hold AIM shares for the first time. So how has AIM changed over this time and why was the change in ISA rules so relevant for AIM?

A significant moment in the history of AIM

The change in ISA rules on 5^th August 2013 to allow ISAs to hold AIM shares encouraged many UK investors to allocate a larger element of their investment portfolio to AIM than had been the case up until then, both through ISA transfers and the annual ISA allowance.

This change in the law, also opened a new opportunity for investors to start Inheritance Tax (‘IHT’)  Planning with their ISA, through investing in the shares of Business Relief qualifying AIM companies (formerly Business Property Relief or ‘BPR‘).

ISA transfers of greatest relevance

The ability to transfer an ISA was particularly relevant, as it avoided the Capital Gains Tax restrictions many investors faced beforehand when considering selling out of main market shares or collective investment schemes and moving into AIM shares.

You can transfer unlimited amounts from existing ISAs, however, the maximum that can be subscribed to an AIM ISA in a given tax year is determined by the ISA allowance at the time – currently £20,000 per individual per tax year.

How has AIM changed over this time?

Having peaked at approximately 1,700 companies at the end of 2007, by the end of July 2013, the number of companies had fallen to 1,086, with a total market value of £64.2 billion and an average market value of each AIM company of just over £59m. Despite the steep fall in the number of companies, thankfully there was a big improvement in quality.

AIM’s largest company in 2013, valued at £3.9 billion, was online fast fashion pioneer ASOS, which has recently moved to the main UK stock market. Only six AIM companies were valued at more than £1 billion, four of which were from the oil and gas sector.

New admissions offer glimpse of risk and rewards of AIM

July 2013 saw 15 new admissions to AIM, whose progress offers a glimpse of the risks and rewards on offer to those investing in AIM companies.

The new admissions in July 2013 included Conviviality Retail (Market cap on admission £87m), Frontier Developments (£48m), Keywords Studios (£59m) and Plus500 (£137m).

Conviviality, a wholesaler and distributor of alcohol, fell into administration at the end of March 2018, less than 5 years since joining AIM, after a series of disastrous acquisitions and profit warnings. Earlier in the year and well before its final demise, our associated research site Investor’s Champion highlighted concerns with Conviviality in this article here ‘Conviviality – plenty of red flags to concern shareholders!’. Led by an over ambitious CEO, whose remuneration structure was poorly aligned with outside shareholders, unfortunately it was just the sort of failure we came across all too frequently in the earlier days of AIM.

Thankfully things have improved considerably on AIM since then and it has also been far better news for shareholders in several of the other new arrivals from July 2013.

While shares in Frontier Developments have fallen back sharply over recent months, by April 2021 this video game developer carried a valuation of over £1 billion.

Keywords Studios, a service provider to the video game sector, has adopted a very successful buy and build strategy and is currently valued at £1.2 billion with the shares up over 1000 per cent since admission.

Plus500, which provides online trading services in contracts for difference, share dealing and options, moved from AIM to the main UK stock market in 2015. It is currently valued at £1.2 billion, with the shares also up over 1000 per cent since admission to AIM. Plus500 has also rewarded shareholders with some very large dividend payments along the way, many times the AIM admission price.

What about AIM in 2023?

Fast forward 10 years and the total market value at the end of July 2023 of AIM’s now 790 companies was £83 billion, an average of £105m per company which is close to double the average value in 2013.

Eleven AIM companies were valued at more than £1 billion with leisure travel group Jet2 the largest at £2.4 billion. Ten years ago, Jet2, which was then called Dart Group, was valued at only £350m.

It’s notable that there are currently no oil and gas companies among AIM’s £1 billion+ brigade, with Greencoat Renewables, an investor in renewable energy infrastructure assets, currently the largest energy company on AIM.

Another key attraction of AIM for IHT planning

A reflection of AIM’s heightened appeal to a broader investor base is perhaps best reflected in the growth in the daily value of shares being traded on AIM.

Back in 2013 the average daily value of shares traded on AIM was £156m per day. By 2021 the average daily value had more than doubled to £395m and even in the current market, where more elevated interest rates have and recessionary fears have seen trading volumes decline materially across the AIM and small cap universe, the average daily value in 2023 to date has still been £217m.

This liquidity is also another key attraction of investing in AIM for IHT planning purposes, the ability to access capital at short notice, should cash be needed.

What about the performance of the AIM market?

The last 10 years has seen the AIM Index deliver its usual roller coaster ride, soaring over the course of the pandemic and reaching all-time highs by the end of August 2021, only to fall back precipitously and currently sit only 6% higher than where it started on 5 August 2013.

As has always been the case, AIM remains a stock pickers market with the index offering a poor guide of the true potential to outperform and Fundamental Asset Management’s AIM IHT portfolio and AIM IHT ISA has significantly out-performed the AIM Index since inception.

 

You can find out more about AIM ISAs here: ‘AIM ISA Explained’.

Our recent Blog here considered how valuations on AIM are the most attractive we have seen. We also covered the valuations topic in depth in our recent webinar AIM: A Half Year Update.