AIM’s spectacular 3 year run

In recent years we have written a series of notes on AIM, and its performance relative to the FTSE All-Share Index. We published the first of these notes on 5th of August 2013, the very date that AIM listed shares were (finally) permitted to be included in ISA accounts. At the time we suggested that this one change would be the catalyst to AIM starting to outperform the FTSE All-Share, after many years of relative underperformance. Our “bullish call” has proved to be absolutely spot on.

AIM has consistently outperformed since then and has enjoyed a buoyant 12 months: in 2017 the AIM All-Share Index rose 24%, while the more concentrated AIM100 Index rose a very impressive 33%. In sharp contrast the FTSE All-Share Index rose a modest 9%, and the FTSE 100 just 8%.

The 3 year performance data is nothing short of sensational in AIM’s favour! The AIM 100 has gained 76.9% and the AIM All-Share 49.4%, but the FTSE 100 has only risen 17% in that period.

The Office for National Statistics recently released a paper entitled ‘Ownership of UK quoted shares’. It stated that 29.7% of all AIM shares were held by individuals, and a further 11.3% by Unit Trusts, where “individuals” are presumably in most cases the ultimate owners. These high numbers confirm the increasing attractions of AIM to private investors, swollen by more AIM companies paying dividends and the £20,000 pa ISA allowance encouraging greater individual ownership.

We are now in a new, post MiFID II world, with the number of brokers’ analysts continuing to decline at a pretty alarming rate. Going forward, the key for AIM companies wishing to continue to perform is to ensure that their broad investor base has free & widely available access to research & forecasts.

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