AIM-IHT Portfolio Service Newsletter – November 2018

Please see our first AIM IHT Newsletter. Given the scale of the market’s recent movements, we felt it more appropriate to revise our data to the 30^th October. In future, this will become a quarterly feature.

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October provided us with a tricky start to the final quarter of 2018. Careful stock screening and constant monitoring remain as important as ever. Accounting irregularities at Patisserie Holdings and Yu Group were a useful reminder, if one were ever required, that AIM is a junior market with less onerous listing requirements. We do not own either of these companies.

 The global equity sell-off and increased risk aversion saw companies with very high valuations hit hard by the slightest disappointment against market expectation. The AIM All-Share index was down over 12% at one stage during October.  We are pleased that no AIM-IHT clients received a letter relating to a ‘10% fall’.

 Brexit remains the key challenge for many of our companies. We note a number of our management teams are beginning to push the button on contingency plans that have been two-years or more in the planning. The only certainty is that many companies will experience Brexit turbulence over the next 6 months, but notwithstanding this uncertainty we believe the longer-term outlook for our companies remains broadly positive.

 While we cannot be immune from periods of increased risk-aversion, we would like to think that our disciplined investment approach helps us withstand the short-term shocks, while leaving us well placed for the longer term. We believe this is what AIM IHT investing is all about.

We are pleased to announce Alpha Portfolio Management have been shortlisted as finalists in the Investment Week Tax Efficiency Awards 2018/2019 – Best AIM IHT Portfolio Service – DFM provider.

Results are announced on 30th November, we’ll have our fingers crossed!

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If you would like to discuss any aspect of Alpha’s AIM IHT service or our other services, please do not hesitate to get in touch.

Risk Warnings: The underlying investments within the AIM portfolio must be held for a minimum of two years to qualify for exemption from IHT. Furthermore, a company’s status may change, leading to a withdrawal of relief from IHT. Alpha has no control over a company’s management and may be unable to prevent it losing its qualifying status. Alpha is not a tax adviser and nothing in this document constitutes advice on taxation matters. Tax considerations may be complex and may differ for each investor, therefore investors should consult their own tax adviser for specific advice. Tax rules, or their interpretation, and tax rates, may alter. Alpha cannot be held responsible for any changes in the tax rules, which may affect the performance of the AIM portfolio.

Investments in certain securities such as those found on the AIM, in specialist sectors and/or unquoted companies will normally involve a greater risk and volatility than more established securities. AIM securities are not admitted to trading on the Official List and the AIM Rules are less demanding than those of the Official List. Shares in AIM companies can be illiquid and it may be difficult to obtain a value of, or dispose of investments. Investments in AIM shares should therefore be considered to be long-term investments. Shares in AIM companies also tend to be quoted in small market sizes so selling large quantities may only be achievable at a lower price than the market quote. Securities can, from time to time, experience significant price and volume fluctuations which may be unrelated to the operating performance of the companies which have issued them. The recorded objective of a portfolio wholly consisting of AIM stocks would be classified as higher risk when considering our definition of investment risk. As a result, investment in the AIM portfolio is only suitable for investors whose attitude to risk is such that they wish to be exposed to higher risk investments. Investors should have the financial ability and willingness to accept such risks.

This information is intended to be informative only, it should not be taken as advice and does not constitute a recommendation to buy or sell securities or to invest in any of the markets and/or sectors referenced. Unless otherwise stated, the source of statistical and other data is Alpha Portfolio Management.