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During the quarter the standout positive
performer was Jet2

The Luna AIM portfolio delivered a return of 4.26%* during the fourth quarter which was slightly ahead of the FTSE AIM All Share TR index of 3.55%*. 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 31/12/2022) the Luna AIM Portfolio has outperformed, returning 2.69%* compared with the FTSE AIM All Share TR of -2.30%*.

During the quarter the standout positive performer was Jet2, which surged 38.7%*. This followed a strong set of results which saw higher than expected revenue and led to the company’s return to profit and reinstatement of its dividend. Due to the broader disruption in the aviation sector in the mid-summer, Jet2 paid out delay and compensation costs in excess of £50 million. At that time they also warned that margins may come under pressure, due to input cost pressures from fuel, carbon cost emissions, a stronger dollar, wage increases and investment. However, Jet2 said it is presently on track to exceed market expectations for profit before foreign exchange revaluation and taxation for its year ending March 31.

On the negative side GB Group was down 48.3%*. The company was the strongest performer last quarter after US private equity firm GTCR confirmed it was considering a cash offer for the identity verification specialist. However, the shares fell back after GTCR walked away from the deal and the share price lost its acquisition premium.

In summary, it was a better absolute and relative quarter for the Luna AIM portfolio with the market backdrop improving and share prices bouncing back from depressed levels. 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 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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