Smaller companies investment should be opened up Go compare with our comparison table

Smaller companies investment should be opened up

27 September 2010 / by Paul Dicken

Smaller companies investment opportunities should be made available if the private sector is to drive UK economic growth, the London Stock Exchange has said.

In its response to the government’s ‘Financing a private sector recovery’ green paper, the Exchange said the success of the UK economy would be built on the performance of high growth small and medium sized companies.

The Exchange is calling for the government to amend ISA rules to allow investment in unlisted companies like those on the alternative invesment market (AIM.)

“The incremental investment that could result from AIM shares being made eligible for ISAs would partially offset the capital and liquidity that has been withdrawn from smaller companies during the financial crisis,” the response said.

Head of the AIM at the Exchange – index for SME companies – Marcus Stuttard said: “The targeted proposals outlined in this submission will help attract a wider set of investors to growth companies, providing them with vital initial capital and supporting deeper liquidity in the trading of their shares, generating a virtuous circle of investment and growth.”

Research by the accountancy firm Grant Thornton, included in the submission, showed that in 2009 UK incorporated smaller companies contributed £12billion to the UK economy, and £1.8billion in tax revenues.

The paper said the historic performance of AIM companies indicated average growth of 35 per cent in turnover a year after joining the market.

By value of investments, the top two most influential institutional investors in AIM are BlackRock Merrill Lynch Investment and Invesco. Lloyds Banking Group, Fidelity International, Artemis and Schroders also feature in the top 10 highest value investors in AIM companies.

Venture Capital Trusts – tax incentivised funds for investing in smaller companies – should be able to participate in the secondary market, the Exchange added.

Increasing the asset ceiling for trusts and other regulatory changes would make investment capital available to a wider pool of companies, the paper suggested.

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 Product NameISA OptionIncome YieldMore Info
Invesco Perpetual Monthly Income Plusyes5.25%More Info >
Income Paid Monthly. Popular income fund that aims to achieve a high level of income whilst seeking to maximise total return through investing in high yielding corporate and Government bonds, together with UK equities. See latest fund factsheet for details.
Henderson Strategic Bondyes5.7%More Info >
Income Paid Quarterly. Investing in higher yielding assets which will include most types of fixed interest securities, this fund aims to deliver a quarterly income to investors. See latest fund factsheet for details.
Newton Higher Incomeyes5.4%More Info >
Income Paid Quarterly. The objective of the Fund is to achieve increasing distributions on a calendar year basis with long term capital growth. The Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Invesco Perpetual Distributionyes4.7%More Info >
Income Paid Monthly. Invesco Perpetual Distribution offers a balance between both income and capital growth through investment in UK based equities and fixed interest securities. See latest fund factsheet for details.
Newton Asian Incomeyes5.43%More Info >
Income Paid Quarterly.The objective of the Sub-Fund is to achieve income together with long-term capital growth predominantly through investments in securities in Asia Pacific ex Japan (including Australia & New Zealand) region. The Sub-Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Newton Global Higher Income yes4.7%More Info >
Income Paid Quarterly. The objective of the Sub-Fund is to achieve increasing annual distributions together with long-term capital growth from investing predominantly in global securities. The Sub-Fund may also invest in collective investment schemes. See latest fund factsheet for details.
Jupiter Merlin Income Portfolioyes3.42%More Info >
Income Paid Quarterly. To achieve a high and rising income with some potential for capital growth by investing predominantly in unit trusts, OEICs, Exchange Traded Funds and other collective investment schemes across several management groups. The underlying funds invest in equities, fixed interest stocks, commodities and property, principally in the UK. See latest fund factsheet for details.
M&G Global Dividendyes3.27%More Info >
Income Paid Quarterly. The Fund aims to deliver a dividend yield above the market average, by investing mainly in a range of global equities. The Fund aims to grow distributions over the long-term whilst also maximising total return (the combination of income and growth of capital). See latest fund factsheet for details.
Kames Strategic Bond yes2.95%More Info >
The primary investment objective is to maximise total return (income plus capital ) by investing in global debt instruments,denominated in any currency, ranging from AAA Government Bonds through to high yield and emerging market corporate bonds. At least 50% of the fund will be invested in sterling and other currency denominated bonds hedged back to sterling. See latest fund factsheet for details.
M&G Optimal Incomeyes2.31%More Info >
Income Paid Twice Yearly.The fund aims to provide a total return to investors based on exposure to optimal income streams in investment markets. The fund invests across a broad range of fixed income assets according to where the fund manager identifies value. See latest fund factsheet for details.
*Current Income Yields are Gross, Variable and Not Guaranteed
**Historic Yield reflects distributions declared over the past 12 months as a percentage of the mid-market price of the fund.
*** This is the target yield the fund aims to achieve per year, it is not guaranteed and could change according to prevailing market conditions. The target yield is net of basic rate tax.
Information correct as at 08/02/2012.

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