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| Fund Overview | AIM look for the following characteristics in the businesses they want to own: - Strong competitive advantages that enable consistently high returns on capital throughout an economic cycle, combined with the ability to reinvest surplus capital at high marginal returns. - A proven ability to generate and grow cash flows, rather than accounting based earnings. - A strong balance sheet and sensible capital structure to reduce the risk of failure when the economic cycle ends or an unexpected crisis occurs. - Honest and shareholder-aligned management teams that understand the principles behind value creation and have a proven track record of capital allocation. They look to buy businesses that meet these criteria at attractive valuations, and then intend to hold them for long periods of time. AIM intend to own between 15 and 25 businesses at any given point. They do not seek to generate returns by constantly having to trade in and out of businesses. Instead, they believe the Fund's long-term return will approximate the underlying economics of the businesses they own. They are bottom-up, fundamental investors. They are cognizant of macro-economic conditions and geo-political risks, however, they do not construct the Fund to take advantage of such events. AIM intend for the portfolio to be between 90% and 100% invested in equities. AIM do not engage in shorting, nor do they use leverage to enhance returns. The Fund's investable universe is global, and AIM look for businesses that have a market capitalisation of at least $7.5bn to guarantee sufficient liquidity to investors. |
| Manager Comments | The Fund returned -2.7% in January. AIM noted near-term uncertainty regarding the pace of global vaccine rollouts was the main headwind to the Fund's monthly performance. Businesses owned in the Fund that will benefit from a normalisation of their operations as vaccines are increasingly widely distributed over the course of 2021 continued to face operating constraints due to COVID-related lockdowns. The top five contributors to performance were Prosus, Microsoft, Alphabet, ICON and PayPal. The five largest detractors were Coca-Cola Co., Mastercard, Estee Lauder, Accenture and Heineken. AIM emphasised that their focus will remain on owning high quality businesses with resilient cash streams, strong balance sheets, competitive advantages underpinning high returns on capital and run by capable management that understand capital allocation. They added that they will avoid the speculative end of the market. |
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