TIME launches ‘smart passive’ tax efficient AIM service
TIME Investments has launched an AIM Business Property Relief (BPR) service called TIME:AIM.
TIME only invests in shares of mature, profitable businesses listed on AIM that qualify for BPR, making them IHT exempt after two years.
The shares will also be ISA qualifying.
To reduce the unpredictability normally associated with the performance of AIM shares, the service uses a ‘Smart Passive’ strategy to select BPR qualifying companies for inclusion in the investment portfolio, removing traditional ‘stock-picker’ bias.
TIME Investments, which also manages the longest running capital preservation focused BPR service (over 20 years), has developed a unique methodology that employs a series of rigorous filters, based on various financial, commercial and performance criteria, to select a portfolio of businesses within the AIM 100 Index.
TIME has spent over a year developing the system and testing the filters to minimise the portfolio volatility without compromising the overall performance.
By targeting 25 of the largest, profitable and most stable AIM companies and through an annual rebalancing of an investor’s portfolio, TIME:AIM seeks to reduce the volatility usually associated with AIM listed shares. The rebalancing process will also seek to ensure that an investor’s holdings are evenly weighted, so that no individual AIM company represents a significant part of an overall portfolio, thus seeking to reduce the risk presented should any individual company experience a material downturn.
The result is a BPR and ISA qualifying AIM portfolio, which provides access to the growth potential of the AIM market but with less risk. On average TIME expects that this approach will deliver more consistent performance in both bull and bear markets. TIME has back-tested its methodology which would have out-performed the FTSE AIM 100 benchmark in each of the last six years.
TIME:AIM will only invest in shares in companies listed on AIM which attract 100 per cent BPR provided they have been held for a minimum period of two years at the time of death.
Stephen Daniels, head of investments at TIME, says: “Last year our TIME:Advance BPR service had the second highest inflows in the capital preservation BPR market. This year we're addressing advisers' criticism of traditional AIM BPR services that they are expensive and their returns are unpredictable. TIME:AIM provides investors with a unique way to access mature AIM listed businesses with strong fundamentals thanks to our innovative ‘Smart Passive’ investment strategy. We have been focused on reducing the risk associated with AIM shares and improving the consistency of returns but in a service with a significantly lower AMC than competing AIM services.”
Natalie Kempster, chartered financial planner at Compass Wealth Management Consultants, adds: "It is refreshing to see that TIME has once again avoided a ‘me-too’ approach to product development. With over 20 AIM BPR services already in the market and most basing their marketing on the strength of their fund manager, TIME’s ‘Smart Passive’ concept is appealing. With an AMC half that of some AIM managers, these savings will compound to make a material difference to investors holding their portfolio for several years and, if their back testing is to be believed, the performance should give investors a less volatile performance than a stock-picker led strategy."
The initial charge payable to TIME for TIME:AIM is 1 per cent (plus VAT). TIME will receive an annual management charge of 0.8 per cent (plus VAT) per annum, around half that of traditional AIM fund managers. TIME does not charge a fee for rebalancing the portfolio.
The service is available within an ISA or non-ISA wrapper for maximum tax efficiency. The minimum investment is GBP25,000 or GBP15,000 for an ISA investment – all applications must be made via an authorised intermediary.