The Luna AIM portfolio delivered a return of 3.3%* during the third quarter which was well ahead of the FTSE AIM All Share TR index of -0.1%*.

We are conscious that this is a very short-term time period, when taking a slightly longer term perspective over the last year (30/09/2020 to 30/09/2021) the Luna AIM Portfolio has returned 43.8%* again also higher than the FTSE AIM All Share TR of 30.8%.

During the quarter the standout positive performer was Kape Technologies, with a 42%** return. The company has now delivered a total return of 126% so far in 2021.  Kape announced the sensational purchase of ExpressVPN in a $936-million acquisition. The figure makes it the largest deal on record in the VPN industry and one of the largest in the consumer privacy space in the past decade. The company also announced half year revenues and profits soared in the six months to June 30. Turnover rose from $59m to $96m, while pre-tax profits of $10m compared with $1.3m the previous year.

Source: Morningstar Direct and Alpha Terminal (30/06/2021 to 30/09/2021)

Judges Scientific was the next best performer in the AIM portfolio during the quarter, delivering a total return of 29%**. The company announced in their end of June results that they continue to be on a recovering trajectory from the pain of 2020 and that growth appears to be returning.

It wasn’t all good news in the period, ASOS shares were lower by 39.5%** – the online fashion retailer warned of slower growth, predicting Covid-19 uncertainty may result in volatility. Towards the end of the month concerns around inflationary pressures in the UK was also weighing on the share price. This was highlighted by their competitor boohoo recently announcing: “Elevated short-term cost headwinds experienced in the first half are expected to continue in H2 alongside recent freight inflation in our supply chain and wage inflation within our distribution centres.” Whilst, this is clearly disappointing in the short term we remain comfortable with ASOS in the AIM portfolio and are looking through this short term disappointment in the share price.

In summary, it was another strong quarter for the AIM portfolio with the good news outweighing the bad to deliver a return more than 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.