Aim companies face near term uncertainty because of economic reasons and the possible abolition of inheritance tax (IHT) by the Conservatives or business relief by Labour, if it wins the next election. Although Aim venture capital trusts (VCTs) don’t specifically seek Aim companies which might offer IHT relief, they still might hold them because there is a good investment case for them. And if other investors divest of these companies because they no longer have IHT benefits it could depress their share prices and even the wider Aim market affecting other stocks VCTs hold.
But these concerns should not cause you to dump your Aim holdings, or to avoid Aim VCTs if you plan to invest in VCTs this tax year.
The rumoured IHT related changes might not happen so when economic and market conditions improve, Aim stocks and VCTs might perform better. Even if there are changes, after an initial hit to the Aim market investors might again put money into Aim companies which are trading well, especially if economic and market conditions improve, increasing their share prices.