The Luna AIM portfolio delivered a return of 6.9%* during the second quarter which was ahead the FTSE AIM All Share TR index of -3.5%*. We are aware that one quarter is a very short time period and when taking a longer-term perspective from launch (01/06/2020 to 30/06/2024) the Luna AIM Portfolio has outperformed, returning 18.0%* compared with the FTSE AIM All Share TR of -7.6%*.
The best performing AIM holding was Frontier Developments, the games developer, which closed up 71% during the quarter. The stock is bouncing from a very low base, hence the magnitude of the strong return during the quarter. One of the catalysts for the strong performance during the quarter was that the company announced two strong updates to the market. The developer said that the company is performing well, with all of its titles performing strongly, its construction and management simulation titles leading the line underlined with a strong sale promotion on the Steam games platform.
On the negative side, Next 15 Group, who combine Insight, Engagement, Delivery and Transformation services to help businesses grow faster, saw their share price drop 14%. This was all suffered towards the end of the quarter after they announced that spending across its technology customers has “remained soft.” In line with prior years, they expect revenue to be second half weighted and for trading conditions to improve and forecast full-year profit to be in line with management expectations.
In summary, it was a good quarter for the Luna AIM portfolio relative to the AIM All Share, following on from a strong end to 2023. Please remember that the AIM portfolio has been created to invest in companies that qualify for Business Property Relief (BPR) and in doing so are potentially outside of the estate for Inheritance Tax Purposes (IHT)***. Whilst delivering long-term performance is obviously welcome, we are looking to mitigate share price weakness that would negate the reason for investing in AIM (saving 40% IHT).
* Source: MorningStar Direct
** Source: Alpha Terminal
*** based on current tax legislation and holding the assets for a minimum qualification period
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