We are conscious that this is a very short term time period, and when taking a slightly longer term perspective from launch (01/06/2020 to 31/03/2022) the Luna AIM Portfolio has returned 25.6%*, outperforming the FTSE AIM All Share TR of 21%.
This quarter we made two changes to the Luna AIM portfolio because of changes to two of the companies held in the portfolio;
We are going to reinvest into two AIM qualifying companies;
During the quarter the standout positive performer was CareTech Holdings, with a 20%** return. This was because they could soon be facing a takeover after shareholder Sheikh Holdings Group, the family office of Haroon and Farouq Sheikh, confirmed press speculation that it is in the “early stages of forming a consortium” to potentially make a bid to buy
CareTech. This is the original founding brothers trying to take back the company from the public market.
It was not all good news in the period, RWS Holdings was under pressure and the shares fell 43%**. The provider of language and intellectual-property support services said ahead of a capital markets event that it started the fiscal year well, and that it expects to deliver good margin growth and progression on last year. However, they expect its performance for the year ending September 30th to be at the lower end of the range of current market expectations. RWS also said that it was supporting its employees in Ukraine following the Russian invasion of the country, and it said it expects to see reduced demand from non-Russian companies for translations into Russian, though it continued to support non-Russian clients in-line with contractual commitments.
In summary, overall it was a tough quarter for the AIM portfolio with the market backdrop providing difficult conditions for investors. 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 long term 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
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