How AIM Responded to the Brexit Vote

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The Alternative Investment Market has fallen since the UK’s vote to leave the EU as, unsurprisingly, investors have favoured larger companies which provide more security in times of uncertainty. The fact that many Aim-traded companies obtain large amounts of revenue from the UK has not helped, given the fall in value of the pound against the dollar and euro. Data collected by broker Peel Hunt show that UK-focused small caps have underperformed those with an international focus by 19 per cent since the referendum vote. This follows 18 months when domestically focused companies had outperformed.But it’s not all been bad news. Aim’s larger companies have fared better in the immediate post referendum period, and the junior market as a whole has outperformed the FTSE 250.

Like the FTSE there have been companies that are in a position to weather the storm better, or even benefit from the post-vote fallout. Pharmaceutical companies and those which benefit from the strengthening price of precious metals, have done well. GW Pharmaceuticals (GWP) and Vernalis (VER) have performed strongly, and pawn broker H&T Group (HAT) has benefited from the rising gold price. Furthermore, the downturn in the index has provided some opportunities for bargain hunters.

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