Interactive Investor

AIM shares take the crown in April

30th April 2021 11:46

Lee Wild from interactive investor

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Not for the first time, the UK index for young exciting companies outperformed every other stock index.

A month ago, I asked if bulls will have “more to cheer in April after a strong March”. Well, the answer was ‘yes’, especially if you were invested in UK smaller companies. 

Britain’s AIM index, packed with exciting, fast-growing businesses, took top spot in the performance table of the globe’s major stock indices. 

With just hours to go util the end of the month, the FTSE AIM 50 – the index of biggest 50 AIM stocks – was up 7.3% and the AIM 100 in second place at 6.8%. The broader AIM All Share is up 6.4%.

AIM is loaded with technology stocks, which have been flavour of not just the month, but the past decade. So, no surprise to see the US Nasdaq tech index in favour. The Nasdaq 100 is up 6.7% for April, with the broader Nasdaq Composite up 6.3%.

While the FTSE 100 is up a more modest 3.7%, that’s a very significant performance given its exposure to sectors like oil, banking and housebuilding. There is very little tech influence on the blue-chip index.

Should you sell in May?

Looking ahead to the month of May and you’ll no doubt see column inches devoted to the old City adage of “Sell in May and go away, come back on St Leger Day”.

This City saying used to make sense back in the days of bowler hats, starched collars and pin stripe suits, when the Henley regatta and the cricket distracted attention, but less so now. 

True, City folk still holiday in the summer, just like everyone else, and trading volumes might not be as high as usual, but the stock market is technologically advanced these days and is well staffed, certainly enough to cope when the big decision-makers are getting some sun. 

It may be more volatile given lower liquidity, and there may be skews one way or the other, but these days investors are just as likely to see gains in the summer months as they are losses.  

These articles are provided for information purposes only.  Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties.  The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.

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