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The Aim 100: 2017

The Aim 100: 2017

For the second year running, capital returns from the Aim 100 have outstripped the other broad London equity indices. A revival in the commodities markets to which it has substantial exposure, and the continuation of some of its disruptive growth stories, helped the alternative market's major index rise 34 per cent in the past 12 months, compared with 18 per cent from the FTSE 100. After income is factored in, Aim's majors delivered a total income of 36 per cent, according to Datastream figures.

All good? Well, not exactly. We tend to stress Aim as a stock-picker's market - by which we mean it's a market of big winners and a lot of losers. If that seems like stating the obvious, compare the performance spread of the FTSE All-Share constituents against those of the Aim All-Share. Over that one-year time horizon, and despite those impressive growth figures, just 56 per cent of Aim constituents were in positive territory, against 76 per cent on the FTSE All-Share.

So there's a fair amount of dross out there. The Aim 100 itself compares better on this broad metric, with 78 of the companies registering share price growth. A second year of outperformance (see chart) provides some ground for those advocating this regulation-light proving ground for the tech, exploration and biotech investment opportunities that might have struggled on the main market.

It is also, more than likely, good news for the readers which rely on Aim's more reliable end for part of their inheritance planning, by making use of tax relief available on certain shares. Unfortunately, as our editor John Hughman highlighted last year, there is no official list of the shares that qualify, but there are plenty of IHT portfolio services out there for interested readers.

In this year's review of the Aim 100, we've afforded some longer analyses for stocks of particular interest. These include newcomer Joules (JOUL), the middle-market clothes retailer which is confounding prophetic visions of the high street's demise. But that's an oversimplified take - the retailer is doing a good job of the crucial transition to e-commerce, with such sales up 30 per cent in the first half. It also has a growing wholesale division serving retailers at home, in the UK and the US. Read more at number 86 in this list.

The strongest riser in this first batch is also joined the market last year. Blue Prism (PRSM, number 68 in this list) placed shares at 78p each with institutional investors just prior to admission in March 2016, and these have just broken the £5 mark. It's probably helping that the entire corporate sector is obsessing over the disruption that its virtual workforce software provides.

The biggest faller in the Aim 100 as a whole over the past year is also found in this bottom half - 4D Pharma (DDDD). If Blue Prism demonstrates the stellar returns that the alternative market can proffer, this biotech demonstrates what happens when that excitement is reined back in. Buying into a drug developer a long way before commercialisation is always going to be a risky business. The share price is still double the 2014 placing price, but it has raised money since.

These stocks demonstrate that sticking with Aim's big guns won't protect an investor, for better or worse, from its swings. But the performance data, and the repetition of many of the names in the list, suggest the Aim 100 companies are gaining trust.

Aim 100: 100-91

Aim 100: 90-81

Aim 100: 80-71

Aim 100: 70-61

Aim 100: 60-51

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By Ian Smith,
21 April 2017

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