The Luna AIM portfolio delivered a return of 0.7%* during the final quarter which was ahead of the FTSE AIM All Share TR index of -1.9%*.

We are conscious that this is a very short-term time period, and when taking a slightly longer term perspective during 2021 (31/12/2020 to 31/12/2021) the Luna AIM Portfolio has returned 16.9%*, which is again higher than the FTSE AIM All Share TR of 6.1%.

During the quarter the standout positive performer was Clinigen Group, with a 45%** return. This was because they have agreed to be taken over by UK-based private equity firm Triton Investment Management in a deal that values the pharmaceutical services company at around £1.2billion. Triton has offered 883p a share in cash, with shareholders also eligible to receive a previously declared final dividend of 5.46p per Clinigen share.

Fevertree Drinks was the next best performer in the AIM portfolio during the quarter, delivering a total return of 16%**. The company has seen several upgrades from Investment Banks. Barclays are particularly positive on the company as they see high growth prospects coming out of the US and an increase in consumers’ desire to ‘drink less but drink better’.

It wasn’t all good news in the period, both Volex Group and ASOS shares were lower by 20%**. Volex, the electronic connector manufacturing company, has been on one hell of a run since Covid started with the share price moving from 90p to close to £5 in 18 months. The correction has brought the share price back to £3.30. After such a rise a pullback looks relatively healthy, and critically, the company continues to deliver on high revenue growth because of such strong demand and we are happy to ride out the short term volatility.

ASOS, the online fashion retailer, continues to be plagued with concerns relating to supply chain challenges.  They also

announced a number of key management and board changes, with both the CEO and Chairman stepping down during the period which only added to uncertainty. After benefiting from more than 18 months of the COVID-19-related tailwind, consumer behaviour has started to normalise, which, along with global shipping disruptions, has dragged down the growth pace in the last quarter of 2021.

In summary, overall it was another strong quarter for the AIM portfolio with the good news outweighing the bad to deliver a return in excess of the FTSE AIM All Share. 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 therefore outside of the estate for Inheritance Tax Purposes (IHT)***.  Whilst delivering strong performance is obviously welcome – we are looking to mitigate share price weakness that negates 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

The content in this publication is for your general information and use only and is not intended to address your particular requirements. Articles should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have been made to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional advice after a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of any articles. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts. Levels and bases of, and reliefs from, taxation are subject to change and their value depends on the individual circumstances of the investor. The value of your investments can go down as well as up and you may get back less than you invested. Past performance is not a reliable indicator of future results.