"There has rarely been a more exciting combination of circumstances for small and micro cap investing," said Williams.
The amount that can be invested into the AIM market through an Enterprise Investment Scheme (EIS) was doubled from £500,000 to £1m in April, and the amount of funds a company can raise through such a scheme in a year has risen from £1m to £5m.
Old Burlington investments launched the Old Burlington Investments AIM Growth fund this week, which Williams believes will be attractive to anyone looking to gain exposure to the market at depressed valuations.
"With AIM fundamentally undervalued and the EIS route to accessing it enjoying major recent enhancements, we think advisers will see the Old Burlington Investments AIM Growth fund, with its high growth potential, as suitable for a significant number of their clients."
Investing in the Alternative Investment Market (AIM) is a high-risk endeavour, however, and one that AWD Chase de Vere’s Patrick Connolly says is best done through a small-cap focused fund with exposure to the index.
"We do not come across investors who buy AIM funds themselves," he commented. "Rather they tend to buy UK small cap funds with an allocation to those stocks."
"It’s a high-risk investment but in the past you have been well-rewarded for that risk."
One option open to investors who want to enter the market is the Cavendish AIM fund, managed by Paul Mumford.
Data from FE Analytics shows it has substantially outperformed the FTSE AIM index over five, three and one years.
Over three years it has returned 39.67 per cent while the index has made just 10.13 per cent.
Mumford’s performance has generally been in line with the average IMA UK Smaller Companies fund, although over five years his returns of 3.25 per cent are substantially down on the 14.06 per cent from the sector.
The minimum investment on the fund is £2,500 and the total expense ratio (TER) is 1.64 per cent.
Performance of fund vs sector and index over 5-yrs
Source: FE Analytics
FE Alpha Manager Giles Hargreave runs the Hargreave Hale VCT fund, which invests primarily in AIM stocks.
Performance has been patchy, although the fund hovers around the average of the 17 AIM Quoted investment trusts.
Performance of fund vs sector and index over 5-yrs
Source: FE Analytics
For those who want a more conventional way to access the power of small cap investing, Hargreave’s five crown-rated Marlborough UK Micro Cap Growth may be a better option.
The fund is the best-performing in the entire IMA UK Smaller Companies sector over five years, returning 65.95 per cent.
Its strong track record has led to its inclusion in the FE Select 100 list of outstanding funds.