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Published on 18 May 2017
How
important are AIM listed companies to a well balanced portfolio of
investments? The AIM market is fast gaining a reputation as a good place
for stock pickers. Having stated life in 1995, as the Alternative
Investment Market, it was set up for small companies that needed to
raise money that would not otherwise be available to them on the main
market. At its height it had as many as 1,700 companies listed, but over
time this has been whittled down to just below 1,000 which include
generally smaller market capitalised businesses but also venture backed
companies and ten businesses that are now worth over a billion pounds.
As Chris Boxall, from Fundamental Asset Management, explains that AIM
has been a ‘huge success’ over the year and continues to deliver
outperformers in a number of areas. Being the place where, generally,
smaller companies trade, Chris says that, if you are prepared to ‘do the
work’ and undertake your research, there continues to be a throughput
of opportunities that develop into investment success stories. Despite
there being now a number on AIM that have a market capitalisation in
excess of £1 billion, including the likes of ASOS, BOOHOO and Fevertree,
Chris says that the ‘sweet-spot’ of aim remains the £10mln to £150mln
market cap businesses that can provide investors with ‘great
opportunities. While the AIM market can provide investment benefits
through an ISA wrapper as well as relief from capital gains tax, as
Chris explains, it is the field of inheritance tax that the real
advantages can be found. While the AIM Market warns that available tax
reliefs should not be the principle reason for investment, Chris says
that so long as you never touch the speculative ends of the market, it
can provide great opportunities.
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