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Holly's Blog: Investors do the Maybot

11 July, 2017

Theresa May is not the only one dancing this week. Investors can pop a cork - we are now in the longest bull market since WW2 and things have been inching up since 2009.

The S&P 500 has quadrupled from its 2009 low of 666. On an annualised basis it has gained over 16% a year. The FTSE 100 has risen from 4,150 on 1 January 2009 to 7,500 today – over this time, the best year has delivered 27% and the worst year -2%.

Beyond the headline grabbing Big Boy indices, it’s always interesting to see how the smaller companies have fared.

Market analyst Jeremy Grime, published a note this week looking in some detail at the shares in the AIM. This is the Alternative Investment Market – a “mini me” market for smaller firms. It is made up of about 1,000 companies which are worth an average of about £80 million. It’s the Wild West for investors – volatile and less certain - but arguably more representative of what’s going on in British households and high streets than the FTSE100, which is international to its core. So how have the UK’s smaller firms changed since 2009?

In March 2009, 22% of the market cap of the top 50 in AIM was in mining. Today that is zero. Adios earth plunderers?

General retail has grown from 6% to 15% - but this is pretty much all online, driven by brands like ASOS and Boohoo. Hello e-commerce.

4% that was accounted for by insurance businesses has now disappeared entirely, as the insurers consolidated after the 2008 financial crisis. Goodbye small financial brands.

The market cap of the top 50 AIM companies has increased 405% to £52bn, from £13bn in 2009. However of the top 50 companies on AIM back then, only 2 today are still in the top 50. That is a family brewer, and the original maker of lino flooring. Guess we still like beer and nice homes.

Out with mining, in with eco?

Mining shares and other businesses perceived to have some detrimental effect on the world are increasingly in the spotlight. More investment providers are talking to us about launching ethical products.

We are interested to hear what you think.

Do you care about the social or environmental impact of where your money is invested?

What’s your mental cut-off point between doing good, and making money?