Most-bought AIM shares for ISAs, five years on
6th August 2018 10:26
by Andrew Hore from interactive investor
On the fifth anniversary of AIM shares in ISAs, Sector expert Andrew Hore looks at how interactive investor customers have been using their tax-free wrappers for small-cap stocks.
It's five years since a rule change allowed investors to add AIM shares to their ISAs, and smaller company shares now play an increasingly important role in portfolio planning among interactive investor clients.
The performance of the AIM All-Share index since 2013 certainly justifies consideration of small-cap stocks. Over the past five years, the AIM All-Share index has risen 49% versus just 22% for the FTSE All-Share and 17% for the FTSE 100.
Over the past 12 months, the AIM index has generated twice the return of the FTSE 100, rising 10.9% versus just 4.5% for the blue-chip index.
The 10 most popular AIM shares among ISA investors so far this tax year:
| Company | Ticker | Performance this tax year (%) | |
|---|---|---|---|
| 1 | UK Oil & Gas | UKOG | 30 |
| 2 | IQE | IQE | -13 |
| 3 | Boohoo.com | BOO | 43 |
| 4 | 88 Energy | 88E | -37 |
| 5 | ImmuPharma | IMM | -87 |
| 6 | Greatland Gold | GGP | 133 |
| 7 | Versarien | VRS | 52 |
| 8 | Hurricane Energy | HUR | 51 |
| 9 | Tern | TERN | 411 |
| 10 | Fevertree Drinks | FEVR | 32 |
Source: interactive investor Past performance is not a guide to future performance
In 2013/14, the first year of AIM ISAs, investors backed a now resurgent Gulf Keystone Petroleum and the infamous (since renamed) Quindell. Four years on and it's all change.
Gatwick gusher UK Oil & Gas is the most popular AIM share for ISAs on the interactive investor platform so far this tax year. The possibility of extracting billions of barrels of oil from underneath Gatwick airport and its surrounds is like cat nip to small-company investors. This is a classic AIM story, with enough potential upside to offset the clear risks involved.
ImmuPharma has been in the doghouse since April following disappointing results from its flagship drug Lupuzor, but investors have piled in at rock-bottom prices, speculating that management faith in potential for the Lupus drug is well-placed.
Investors have also enjoyed huge success with Greatland Gold and Tern this tax year, up 133% and 411% respectively. Even Fevertree Drinks, now the second-largest company on AIM, shows little sign of ending its stunning run from a 134p IPO price less than four years ago to a recent high of almost £40!
Investing in small-cap shares is inherently risky, but young, fast-growing companies possess far greater opportunity for generating significant shareholder returns than ex-growth blue-chips. AIM is over 20 years old now and well-established as a home for exciting and innovative businesses. While investors will prefer the perceived safety of FTSE 100 stocks for longer-term holdings, they are also comfortable taking the extra risk for potentially much greater returns offered by more dynamic AIM shares.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
Disclosure
We use a combination of fundamental and technical analysis in forming our view as to the valuation and prospects of an investment. Where relevant we have set out those particular matters we think are important in the above article, but further detail can be found here.
Please note that our article on this investment should not be considered to be a regular publication.
Details of all recommendations issued by ii during the previous 12-month period can be found here.
ii adheres to a strict code of conduct. Contributors may hold shares or have other interests in companies included in these portfolios, which could create a conflict of interests. Contributors intending to write about any financial instruments in which they have an interest are required to disclose such interest to ii and in the article itself. ii will at all times consider whether such interest impairs the objectivity of the recommendation.
In addition, individuals involved in the production of investment articles are subject to a personal account dealing restriction, which prevents them from placing a transaction in the specified instrument(s) for a period before and for five working days after such publication. This is to avoid personal interests conflicting with the interests of the recipients of those investment articles.