Stellar AIM ISA
This Aim IHT ISA offer from Stellar Asset Management is managed by Manchester stockbroker Pilling & Co. It invests in AIM stocks which qualify for Business Property Relief. After two years the investment should become IHT free. An optional insurance policy offers protection against falls in value.
- Long-standing and experienced AIM IHT managers – the portfolio has been operating since 2008
- 40-stock portfolio
- Preference towards low volatility stocks
- Insurance policy option can protect against market falls
- £20,000 minimum
Stellar Asset Management specialises in tax efficient products. It was founded in 2007. Its AIM IHT ISA offer is managed by Pilling & Co, a long-standing Manchester-based private client stockbroking firm.
Target return and strategy
There is no specific target return, however the team aims for a low volatility approach and would prefer slightly reduced performance if it means volatility and risk are lower.
A 40-stock portfolio is typical; however larger clients may get slightly more holdings. When a client invests in the service the money is split equally between the stocks in the portfolio, therefore clients have slightly different portfolios.
The managers have specific criteria. At the top of the list is a business they can understand. They aim to avoid companies that will succeed brilliantly or fail, with no scenario in between: for instance oil, mining and gas companies.
Management having a stake in the business is important, as is a strong balance sheet.
Optional life insurance policy
Stellar offers an optional insurance policy. This policy will pay out any loss on death should the portfolio have fallen in value. The maximum amount insured is typically £250,000. An annual fee of 2.5% applies for the standard policy, which is subject to terms and conditions. These are based on age and health – on standard terms you must be under 80 and the policy expires when you reach 85. The insurance pay-out may be subject to IHT unless written in trust (Stellar has a draft trust document for this purpose).
Annual performance (%)
|Stellar AIM IHT Portfolio||38%||-2%||30%||10%||12%|
|FTSE AIM All-Share||20%||-19%||4%||17%||24%|
Source: Stellar, to 5 January each year, ending 2018. Shows total return, inclusive of dividends, net of management fees and commission. Past performance is not a guide to the future. Note this is the model portfolio performance: every client's portfolio will be slightly different
Capital is at risk and you should not invest money you cannot afford to lose.
Eligibility for BPR is assessed at the date of death and will depend on the companies remaining qualifying. Remember, tax rules can change and the value of tax benefits depends on circumstances.
Liquidity of companies listed on AIM is a key risk. AIM can be a volatile market with little trading at certain points. Octopus is one of the largest managers in this market, which brings benefits in terms of company access but could also restrict trading ability.
There is an initial charge of 0.5%. The annual charges are 1% plus VAT. An additional fee applies if the insurance policy is chosen. Dealing charges are 1%. The minimum investment is £20,000. Please see the provider's documents for more details on the total fees and charges. If you would like a full breakdown of charges, or a personal illustration, please let us know.
Wealth Club aims to highlight investments we believe have merit, but you should form your own view. You should decide based on the provider's documents and ensure you have read and fully understand them before investing. This review is a marketing communication. It is not advice or a personal or research recommendation to buy the investment mentioned. It does not satisfy legal requirements promoting investment research independence and is thus not subject to prohibitions on dealing ahead of its dissemination. 22.2.18
- Portfolio size
- £50.4 million
- Average market cap
- £675.0 million
- Initial charge
- Saving via Wealth Club
- Net initial charge