AIM on platform.. why wouldn’t you?

Last year’s unwelcome introduction of Covid into our everyday lives saw several trends and behaviours emerge. Family solicitors are seeing a significant increase in requests for will writing. And financial advice is no different, with financial advisers seeing an increase in demand for Inheritance Tax Planning (IHT) solutions.

Historically, IHT solutions had only been available directly with investment managers, with advisors forced to direct assets off their designated wrap platform in order to access these. This can be to the detriment of advisers and their underlying clients, as it makes management and monitoring, among other things, more difficult.

Adviser platforms have now evolved to allow clients to invest in individual stocks, including those listed on AIM, the London Stock Exchange’s smaller companies growth market. Many (but not all) AIM shares qualify for Business Relief, which means that if they are held for two years and until death, the holder of the shares is able to mitigate 100% of their potential IHT bill.

Platforms further evolved to allow Discretionary Fund Managers (DFMs), such as Fundamental Asset Management, to manage portfolios of AIM stocks on platform on behalf of clients. This means you can offer AIM for Inheritance Tax planning solutions to your clients and keep their assets in one place, thereby retaining the benefits a platform has to offer.

But what are the benefits?


Platforms have grown to become the dominant force in asset administration for retail clients and financial advisers in the UK. They are in a formidable position to take advantage of scale in terms of pricing. This is something they do well, allowing clients to benefit from reduced dealing, product, custody and investment costs.


Investment options for retail clients can often be limited due to the small amounts they are generally looking to invest. However, the growth of platforms has effectively made them the key distribution method for investment managers in the UK. As well as being able to negotiate preferential fees, they can give clients access to investment products they would not normally be able to access by going directly. As a result, clients benefit from a wider pool of investment options at a cheaper price.


Platforms in their most basic form are a technology which allows a financial adviser to retain and manage assets on behalf of their clients. Advisers benefit from being able to manage everything in one place, reducing time on administration and allowing for more time to be spent with clients. The platform technology itself allows advisers to take advantage of an advanced reporting system. On top of this, platforms are increasingly evolving to support and integrate adviser back office systems, including client portals. Platforms also facilitate custody which removes an element of risk from an advisor’s business model.

The benefits are clear for clients and advisers. However, platforms are also beneficial for investment managers like Fundamental.

The ability to manage client portfolios in one place and to remove custody risk from our own business model is a key advantage. As such, we are committed to the IFA and platform markets and work closely with our platform partners, including Standard Life Wrap, Elevate, Nucleus (listed on AIM), Transact, Ascentric, Funds Network and CoInvestor.

Enjoy your weekend!

Derek McLay; Business Development Manager; 077437 25659/ [email protected]

Join me and the Fundamental Asset Team at our next adviser webinar where we will be discussing another record-breaking year for AIM and what could be in store for 2021. 

Click the picture below to register for the session.

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.

We also have an Adviser Centre with a wealth of information to support financial advisers including case studies, adviser webinars, guides and contact details.


AIM is fast maturing into a grown-up stock market

An article in the Daily Telegraph’s popular Questor column commented on the encouraging evidence of AIM’s centre of gravity tilting away from the ‘get-the-founders-rich-quick outfits’ towards real, well-run businesses with bright prospects.

Telegraph subscribers can read the article here, alternatively, Yahoo! Finance has also kindly provided a free to read version here.

AIM’s fabulous performance in 2020 certainly suggests London’s growth market is indeed a very different proposition to the one we first started investing in for Inheritance Tax planning purposes back in 2004.

AIM ended 2020 with its market value at an all-time high of £131 billion. A record 24 AIM companies were valued at more than £1billion each at the year end and 246 AIM companies were valued at £100m or more, the majority of which were in the £100m – £250m valuation bracket.

After rising 10.1% in December, the AIM index finished 2020 up 20% for the year, an amazing achievement in the circumstances and significantly outperforming the main UK index of 100 stocks in the year, which fell 15%. Specialist research house Equity Development commented how this must be “the biggest one-year differential in AIM’s 26-year history”.

But this was not just a flash in the pan and over the 5 years to the end of December 2020, the AIM All share index has risen 60% whereas the main UK market is up only 11%. We acknowledge that this excludes dividend income, and the main UK market has yielded over 4% per annum over this period. However, as commented on by our associates Investor’s Champion in an article here, 2020 highlighted the fragility of dividends for highly geared companies on the main UK stock market, many of whom have been forced to cut or postpone dividend payments.

As individuals own 25.1% of AIM companies, against just 11.3% of FTSE 100 companies (source: “Ownership of UK shares, UK Government, January 2020”) UK private investors will have benefited very nicely from this outperformance.

It is also worth emphasising that to benefit from the Inheritance Tax planning reliefs, individuals need to own the qualifying AIM shares directly in a segregated portfolio in their own name i.e. the tax benefit cannot be gained through investing via a collective/fund structure. Fundamental Asset Management’s AIM portfolios can also be accessed through a number of adviser wrap platforms.  Our Document Library and Adviser Centre has a wealth of information on investing in AIM Inheritance Tax portfolios.

While it was a poor year for new issues/IPOs, with only 32 new entrants raising £486m, AIM saw a large number of secondary fund raises with a total of £5.27 billion raised, making 2020 the best year for secondary issues since 2010.

Not as illiquid as people think!

The average daily value of AIM shares traded also hit all-time highs at £326m, an increase of £91m per day on 2019. Trading volumes remained strong with c £83 billion of shares traded in the year as a whole compared to c£60 billion in 2019. Those are big numbers (for private investors at least!) and counter the argument that AIM shares are illiquid.

ASOS (LON:ASC) remained the largest company by market capitalisation with a year-end valuation of £4.8bn, ahead of online fashion rival Boohoo Group which was valued at £4.3bn.

Although there has been steep drop in the number of companies on AIM, from a peak of 1,694 in 2007 to only 819 at the end of 2020, the quality of companies is far higher.

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.


CoInvestor Virtual Manager Showcase

Listen to our Business Development Manager Derek McLay give an 8 minute pitch on what makes Fundamental Asset Management different at the CoInvestor Manager Showcase on 15th December 2020.

If you would like to find out more about Fundamental’s AIM portfolio service you can contact Derek directly on 07743725659 or [email protected]

Fundamental Asset Management has delivered exceptional investment returns for more than 16 years. You can find our latest factsheets, from the link here.

If you would like to find out more about Fundamental’s AIM portfolio service you can contact Derek directly on 07743725659 or [email protected]

Thank you for watching, The Fundamental Asset Team


AIM market value hits all-time high

The latest monthly AIM update from our associates Investor’s Champion highlights the continuing strong performance of AIM, with the total value of London’s growth market hitting an all-time high of £118 billion at the end of November.

November closed with 22 AIM companies valued at more than £1billion, three more than at the end of October and the most on record. The £billion brigade welcomed video game publisher Team17 Group and veterinary specialists CVS Group, both Fundamental AIM Inheritance Tax portfolio holdings.

The AIM index as a whole had another very strong month, rising 10.7% ending November up 9.6% for the year. That is a considerable achievement following the sharp falls in February as the pandemic impacted stock markets across the world.

What is all the more surprising about AIM’s continuing momentum is that it appears to counter the rotation to so-called ‘value’ stocks going on in other markets, reflected in the 12.3% rise in the month from the main UK index of 100 stocks, although this still remained 16.9% down for the year as a whole.

Despite AIM’s focus on younger, more rapidly growing companies and the seemingly stretched valuations for some AIM stocks, investors are evidently still prepared to pay up for the exciting growth prospects available on AIM, compared to the lower growth opportunities from many of the dinosaurs of the main UK stock market.

When investing in AIM for Inheritance Tax planning purposes we are drawn to the larger, more profitable and better-established AIM companies. This has seen our AIM Inheritance Tax portfolios miss out on the strong performance this year from some more speculative AIM stocks, notably in the area of healthcare and hydrogen fuel cells, however, we have still seen strong gains elsewhere.

Over the 5 years to date the AIM index has risen 47% (and our AIM Inheritance Tax portfolios are up even more) whereas the main UK market is up only 9.7%. We acknowledge that this excludes dividend income and the main UK market has yielded over 4% per annum over this period, however, 2020 has highlighted fragility of dividend payments for highly geared companies on the main UK stock market, many of whom have been forced to cut or postpone dividend payments.

It has been clear to us for a long time that many UK main market companies have failed to invest sufficiently in their businesses to support future growth, preferring instead to use available cash to pay dividends or support share buybacks. This is inherently wrong and has manifested in lacklustre growth and poor share price performance.

Many main market companies have the additional burden of needing to support large legacy pension commitments, which demand regular cash injections, something that does not apply to the vast majority of more youthful AIM companies.

Trading volumes on AIM also remained strong with £8.6billion of shares traded in November. This is a big number and counters the argument that AIM shares are illiquid!

Another £620m was raised in the month through secondary fund raises bringing the total for the year to £4.7billion. This compares to only £321m raised in the year to date through IPOs.  We only occasionally participate in IPOs across our AIM Inheritance Tax portfolios as we generally like to see companies prove themselves on public markets first, however, there are exceptions.


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


Encouraging to see more ESG initiatives from AIM companies

We have been keeping a close eye on the reaction of AIM companies to the increasing ESG demands of customers and investors.

This week brought news of initiatives from two AIM companies which highlight the growing focus on ESG from the AIM community.

Science in Sport (LON: SIS), the premium performance nutrition company serving elite athletes, sports enthusiasts and the gym lifestyle community, announced its first major launch of an environment-friendly pack.

Science in Sport has invested in packaging technology and plan to convert the bulk of its protein powder range into recyclable pouch packaging, this being a first for the sports nutrition industry globally.

The PhD Nutrition pouch range will move to recyclable material, with a full range change completed in early 2021. In the last 12 months, PhD Nutrition has filled 700,000 pouches which have ultimately gone to landfill.

We commend the initiative of this small AIM company but also find it somewhat worrying that PhD will be the first sports nutrition brand in the world with packaging which can be recycled. Furthermore, this approach will only be rolled out to the Science in Sport brand later in 2021.

The new pouch is the first step in the Company’s strategy to minimise waste and the negative impact on the environment. Initiatives to support the recycling of gel and bar packaging are expected to commence in 2021.

We have never been tempted to invest in Science in Sport, which has been unable to make a profit for many years, and the shares continue to languish 45% below the June 2013 AIM listing price. However, it’s a credit that a small struggling AIM company has taken the initiative on this matter, although not before time given all the discarded SiS pouches one comes across!

Stephen Moon, Science in Sport’s Chief Executive Officer, commented:
“We take our ESG strategy very seriously and are in the process of introducing wide-ranging measures aimed at reducing the environmental impact our manufacturing footprint, brands and products have on our planet. The introduction of a recyclable pouch is the first of several initiatives over the short and medium-term.”

We hope they are rewarded for this initiative, as shareholders could also do with some encouragement.

Inspecs Group (LON:SPEC), the designer, manufacturer and distributor of eyewear frames, a relatively new addition to AIM in February this year announced news of a new ‘house brand’, made from fully sustainable and recycled materials.

The new brand is due to be launched in 2021 and is in line with its continued ESG improvement policy. This is another great initiative which we hope will go down well with customers, however, it would be helpful if Inspecs could elaborate on the ESG improvement policy referred somewhere on its website.


ESG investing is an undeniable and perpetual growth story which is not slowing down and is expected to be a significant part of financial advice in the future.

How does AIM perform against ESG principles and what opportunities in ESG does AIM have to offer?

Please try and join us at 2pm on 24 November for our webinar, ‘ESG & AIM – do they mix?’  You can register through the link here


Investors beware – fairy tale investing is here

London’s AIM market has performed strongly over the pandemic, materially outperforming the main UK stock market, which has now been the case for several years.

In this interview with Jeremy Naylor of IG markets, Chris Boxall, co-founder of specialist investment manager Fundamental Asset Management, discusses the performance of several companies whose shares have soared over recent months, and asks where they could go from here given the elevated valuations.

He also considers the unusual ’investing’ environment, where profit and return now appear to be of secondary importance to many investors as they seek out the next great idea.

Companies covered in the interview include:
Abcam (ABC)* 2 minutes 10 seconds
Codemasters (CDM)* 3:38
GB Group (GBG) 5:56
GlobalData (DATA) 8:21
Fairy tale valuation methodology and concept investing 10:30
D4t4 Solutions (D4T4) 11:56
Watkin Jones (WJG)* 14:26
Elixir International (ELIX)* 18:21

* Existing Fundamental portfolio holdings

You can find out more about Fundamental’s AIM portfolio service, including the latest fact sheets, from the link here.

Fundamental Asset Management has delivered exceptional investment returns for more than 16 years.


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.


The Truth about Risk in AIM

A chance to see again the webinar from the 30th September talking about the perceived risks of investing in AIM.


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.


A watershed event for AIM

In this video, Chris Boxall, co-founder of Fundamental Asset Management, discusses a watershed event for AIM as one of the market’s largest companies makes a big acquisition. For further information on Fundamental’s high performing AIM portfolio service please visit the link here or contact the Fundamental team by emailing [email protected]