Time Investments is to launch a smart beta passive strategy covering the Alternative Investment Market (Aim) that aims to reduce volatility by only holding the 25 largest stocks in an equal-weighted portfolio.
The Time:Aim service is the first smart beta Aim strategy, and will look to buy shares in “mature and profitable businesses”. It will hold companies that qualify for 100 per cent business property relief (BPR), potentially making holdings more tax-efficient for investors.
Time said its smart beta approach would help minimise volatility associated with the micro-cap Aim market by screening stocks on various financial, commercial and performance criteria. It will limit individual stock exposures by equally allocating capital and will rebalance on an annual basis.
The 25-stock portfolio seeks to provide access to the potential growth of Aim-listed firms while limiting the risk, Time said.
The service will charge an initial fee of 1 per cent and an annual management charge (AMC) of 0.8 per cent, with a minimum investment of £25,000, or £15,000 for an Isa investment.
Head of investments Stephen Daniels said: “We’re addressing advisers’ criticism of traditional Aim BPR services: that they are expensive and their returns are unpredictable. We have been focusing on reducing the risk associated with Aim shares, but in a service with a significantly lower AMC than competing Aim services.”