AIM shares: Best AIM shares to buy and AIM ETFs explained

Our guide shows you the biggest AIM stocks and how to buy them.

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Smaller companies on the London Stock Exchange tend to be found on the alternative investment market rather than the main market – generally, they’re there because they want to raise capital for their businesses but either couldn’t afford the costs required or didn’t meet the requirements necessary to list on the London Stock Exchange’s Main Market. If you’re looking to invest in the alternative investment market we’ve compiled some of the key information, risks and how to get started.

What is AIM?

AIM stands for alternative investment market. It’s a separate market on the London Stock Exchange and is aimed at helping smaller companies grow.

Some companies choose to list on AIM as a gateway to getting on the Main Market, like Domino’s Pizza group and Hiscox, but there are some recognisably larger brands on AIM, such as ASOS, boohoo.com and Fevertree. AIM comprises over 800 stocks.

How to invest in AIM

Investing in AIM can be as easy as other investments. If you want to invest in a representation of all AIM stocks, then you can invest in a fund that lists AIM companies. You can find funds that suit you on a share trading platform.

Another way is to buy individual stocks. You’ll want to research into which companies you want to invest in and search for them on your chosen share trading platform.

What are the largest AIM stocks?

The 20 largest AIM stocks by market capitalisation are:

Compare AIM trading platforms

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Name Product Finder score Min. initial deposit Price per trade Frequent trader rate Platform fees Offer Link
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eToro Free Stocks
4.4
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$100
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XTB
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interactive investor Trading Account
4.2
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£0
£3.99 (free regular investing)
£0
£4.99-£19.99
Get £100 free trading credit when opening a Trading Account by 30 April. Capital at risk. T&Cs apply.

Capital at risk

Platform details
Hargreaves Lansdown Fund and Share Account
4.2
★★★★★
£1
£11.95
£5.95
£0

Capital at risk

Platform details
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All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.

Are there AIM ETFs?

There aren’t any AIM tracker funds or ETFs, mainly because it’d be quite difficult to do so due to the size of the companies in the index.

Why should I invest in AIM?

As you’d be investing in companies very early on, there’s more chance that they’ll fail and therefore there’s more risk associated with your investments. This added risk of volatility or associated tax incentives is what attracts some investors to AIM companies.

What are the tax benefits of investing in AIM?

By investing in AIM companies, you might be able to take advantage of tax relief such as inheritance tax relief, capital gains tax relief and tax relief on shares that qualify for the Enterprise Investment Scheme (EIS). As always, you can get tax relief from holding your stocks in a stocks and shares ISA.

What are the risks of investing in AIM?

A lot of the companies listed on AIM are still young which means that they aren’t as liquid (meaning it’s harder to sell shares). There is generally more risk associated with these stocks compared with the London Stock Exchange’s Main Market, which is made up of established companies.

Is now a good time to invest in AIM?

The coronavirus pandemic shook up all industries and stock indices, AIM included. It lost 38% in value between January and mid March, its lowest point during the pandemic but it has bounced back a little since then and recovered most of its losses.

AIM still isn’t trading at the same levels that it was pre-pandemic, so it’s up to you to decide whether you think it will continue to grow further.

Bottom line

Companies on the AIM don’t have to be small – there are some well known brands on the alternative investment market. If you want to invest in these stocks then make sure you’ve done your research and you know the risks.

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.

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