Eight years ago this week investors were allowed to put Alternative Investment Market (AIM) shares into their Isas for the first time. AIM, often called the junior stock market, is home to a number of household names such as Jet2 Holidays and Asos, but it is more typically a place for fledgling companies to list. That means there is great potential for gains among up-and-coming businesses, but also the risk of significant share price falls.
So how have investors who added AIM shares to their Isas fared? Here are the top and bottom performers since 2013.
Top Performing AIM Stocks
The top five best performing AIM shares have produced some staggering gains in the period, according to Morningstar Direct data. Competition website Best of the Best (BOTB), which offers dream cars in a weekly lottery, is the winner since 2013, with an incredible gain of 7,130%. For comparison, the FTSE AIM All-Share Index is up 73% over the same period.
AIM has plenty of natural resources companies too, so it’s no surprise to see two miners in the top five best performers. Gold miner Greatland Gold (GGP) is the next biggest winner with a rise of 6,300% in the period, while platinum and gold producer Eurasia Mining (EUA) can also boast a 3,650% return. A booming gold price since the start of the pandemic has helped supercharge these companies' gains. Two unrelated industries make it into the elite list, flooring specialist Victoria (VCP) and ESG-focused asset manager Impax (IPX) with gains of 6,312% and 4,190% respectively.
Worst Performing AIM Stocks
At the bottom of the list are five companies whose share prices have fallen by more than 99% over the past eight years, a reminder of the inherent risks in investing in smaller companies. Like the winners, they are a diverse bunch, from fertility diagnostics firm MyHealthChecked (MHC) to digital ad company Bidstack (BIDS). Bidstack has had a turbulent last few years involving a company voluntary arrangement (an alternative to going into administration) in 2017 and a takeover in 2018.
Given the volatility in the energy sector in recent years, it’s unsurprising to find two resources companies in the bottom five, including African oil and gas firm Tower Resources (TRP) and Serinus Energy (SENX), which has operations in Romania and Tunisia. It’s worth pointing out that these companies may be down but they are not out. They are still trading and in some cases have produced positive returns in the year to date: Tower Resources is up 30% in 2021 on the oil recovery, while MyHealthChecked has rocketed 77%. Of course, when a share price falls significantly, it’s a brutal uphill struggle to claw back those losses. For example, a share price that falls 50% from 100p to 50p, needs to rise by 100% to get back to where it started.
AIM’s Rollercoaster
AIM offers the potential for high growth, but shares are often more volatile than larger companies and there’s a higher risk of the companies failing. The stock market for small companies has produced the likes of Asos (ASOS), Fevertree (FEVR) and Boohoo (BOO), whose shares have risen by many multiples since they launched. But plenty of companies have fallen by the wayside in the last few years. We looked at how the AIM market has changed since it launched in the summer of 1995.
Away from the usual attractions of investing through an Isa, AIM shares are often popular with investors wanting to minimise their inheritance tax liability because many (but not all) AIM stocks are exempt from IHT if they are held for more than two years (a financial adviser can help on estate and tax planning).
(A word on the methodology: the performance figures quoted are on a total return basis, so it assumes that dividends are reinvested. The assumption that investors often have is that smaller companies rarely pay dividends because they are purely growth stocks. But in many cases they do. Our winner over eight years, Best of the Best, has paid special dividends on a regular basis, the last being in January 2021, for 40p per share).
