Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

What are the top AIM stocks to watch?

AIM (short for alternative investment market) is the most successful growth market in the world, and it offers some unique opportunities to traders and investors. Here are the top AIM stocks to watch and how to take a position.

Biggest AIM stocks to watch

  1. ASOS
  2. boohoo
  3. Abcam
  4. Hutchinson China Meditech
  5. Jet2

ASOS (£5.3 billion)

ASOS has been one of the biggest beneficiaries during the transition to online shopping, which has left bricks-and-mortar retailers struggling. As a result, the online fashion retailer has continued to deliver growth in its core UK market as well as expansionary geographies in the US and Europe.

At the time of writing, ASOS had shot up to the first-place spot on the AIM rankings for biggest market cap, coming in at £5.3 billion.

Trade ASOS shares

boohoo (£4.2 billion)

boohoo was established in 1996 and has grown into one of the leading players in the online fashion industry. In addition to its core boohoo lines for both men and women, the company also owns a slew of other labels including PrettyLittleThing, Nasty Gal, MissPap, Karen Millen and Coast. It distributes many of its products from two UK warehouses, with a particularly strong presence in the US, Europe and Australia.

boohoo’s share price took a hit in 2020 following a report that alleged one of the company’s suppliers was paying below minimum wage and risking the health of workers by not following social distancing guidelines. Since then, the company has climbed up the top rankings of AIM companies, coming in with a market cap of £4.2 billion.

Trade boohoo shares

Abcam (£3.3 billion)

Abcam produces and sells protein research tools that are used by life scientists. These include antibodies, proteins and peptides, and research kits, which are utilised in a number of industries, including drug discovery, diagnostics and for basic research. The company is headquartered in Cambridge but has a presence in both the US and Asia. It claims there are around 750,000 life scientists in the world and that two-thirds of them use its products.

Abcam is in a net cash position and has not had to furlough any staff or take advantage of any government schemes, suggesting it’s strong enough to see through the crisis. As a result, the company has been able to hold onto its third-place ranking on this list, with a market cap of £3.3 billion.

Trade Abcam shares

Hutchinson China Meditech (£3.1 billion)

Hutchison China MediTech is a biopharmaceutical company pursuing treatments for oncology and immunological diseases. It currently generates revenue by manufacturing and distributing prescription drugs and other health products to consumers in China. It’s majority-owned by CK Hutchison Holdings Limited, a conglomerate with annual sales of over $500 billion.

The company’s operations in China have been largely unaffected by the coronavirus outbreak and, although it’s monitoring the situation, it seems more resilient than most. Hutchinson China Meditech had a market cap of £3.1 billion at the time of writing, making it fourth on this list.

Trade Hutchinson China Meditech shares

Jet2 (£2.9 billion)

Jet2 is a low-cost airline which offers flights from the UK to a variety of destinations. The company’s competition includes the likes of British Airways and EasyJet and the company has 10 bases in the UK across a range of different airports.

The most recent of these is set to open at Bristol airport in July 2021. Jet2 has climbed up the rankings since 2020 with a market cap of £2.9 billion at the time of writing. This could be as people in the UK hope to be able to go on holiday following the lifting of national lockdown restrictions.

Trade Jet2 shares

20 largest AIM stocks by market cap

Market cap on 26 April 2021
ASOS £5.3 billion
boohoo £4.2 billion
Abcam £3.3 billion
Hutchison China MediTech £3.1 billion
Jet2 £2.9 billion
Fever-tree £2.8 billion
ITM £2.7 billion
RWS Holdings £2.7 billion
Ceres Power £2.4 billion
Keywords Studios £2.2 billion
GlobalData £1.8 billion
Burford Capital £1.8 billion
GB Group £1.7 billion
Gamma Communications £1.7 billion
Breedon Group £1.6 billion
CVS Group £1.4 billion
Impax Asset Management Group £1.2 billion
Learning Technologies Group £1.2 billion
Frontier Developments £1.2 billion
Blue Prism Group £1.2 billion

How to trade or invest in AIM shares

  1. Decide whether you want to trade or invest
  2. Create an account or log in and go to our platform
  3. Identify your opportunity
  4. Take steps to manage your risk
  5. Open and monitor your position

Trading AIM shares

Trading AIM shares with us means that you’ll be speculating on the share prices rising or falling without owning the shares directly. Instead, you’ll be opening a position with spread bets or CFDs, which are leveraged derivatives, and you can buy or sell based on your prediction of the market movement.

  • ‘Buying’ AIM shares means that you’re taking a position on AIM share prices rising – known as going long
  • ‘Selling’ AIM shares means that you’re taking a position on AIM share prices falling – known as going short

Since spread bets and CFDs are leveraged, it’s important that you take steps to manage your risk because leverage can increase both your profits and your losses.

Learn more about the impact of leverage on your trading

Investing in AIM shares

Investing in shares is different to trading because you’ll be taking direct ownership rather than just speculating on prices rising or falling. This means you’ll make a profit if you sell your shares for a better price than what you paid to buy them, or you’ll incur a loss if you sell your shares for less than this price.

Leverage isn’t available for investments, so you’ll need to commit the full value of the position upfront. While this can increase your initial outlay, it also caps your risk. Remember that investments can fall in value as well as rise, so you may receive back less than you initially invested.

Here’s how our share dealing commissions match up to our competitors:

IG Hargreaves Lansdown AJ Bell
Best commission rate on US shares Free £5.95 £9.95
Standard commission rate on US shares £10 £11.95 £9.95
FX conversion fee 0.5% 1.0% 1.0%
Best commission rate on UK shares £3 £5.95 £4.95
Standard commission rate on UK shares £8 £11.95 £9.95
How to qualify for the best rate Open 3 or more positions on your share dealing account in the previous month 20 or more trades in prior month n/a

Why do companies list on AIM?

The main reason businesses choose to go public on AIM is because they need capital to grow, and sourcing other finance can be difficult. AIM is designed for small- and medium-sized businesses that wish to list their company on a stock exchange but are not yet ready for a full traditional listing.

Learn more about investing in the AIM market

AIM has proven its ability to provide the vital funding needed to nurture small businesses. The majority of funds raised on AIM is by companies that have already listed, demonstrating that firms are able to tap into vital liquidity even after they have conducted their IPO. There has been over a million trades per month on AIM companies in 2020, representing around £300 million worth of trading every day.

It also brings companies under a recognised regulatory and compliance framework that sets the standards for listed companies, which gives them higher recognition among investors and important institutions like banks and foreign lenders.

But, while the regulatory regime is strict, it’s designed to make it easy for new businesses to float on AIM. That’s because it doesn’t require a business to be a certain size (as is the case elsewhere). Instead, AIM requires a company to have a three-year operating history and the ability to demonstrate its worth.

Are AIM stocks a good investment?

In a nutshell, AIM stocks offer both higher risk and higher reward for investors. The attractiveness of the AIM market is the ability to invest in companies early on to help build the value of both the company and your investment over the longer term.

But, share prices can move by double digit percentages in a single day – so it’s important to take steps to manage your risk when trading or investing in AIM stocks.

Many highly successful companies and widely recognised names began their lives as public companies by listing on AIM before moving on to a traditional listing: Domino's Pizza Group, insurance provider Hiscox, self-storage firm Big Yellow Group and bookmaker GVC Holdings, to name a few.

If you’d like to learn more about risk management, why not try out an IG Academy course. Or, if you’re not ready to trade the live markets, we also offer a demo account – giving you £10,000 in virtual funds to build your confidence in a risk-free environment.

Create a demo account

Last updated : 2021-05-10T09:27:00+0100

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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