Is AIM better than alternatives such as yearly rebalancing back to target weightings?
Overall my guess is they're much the same. A big difference however is that you're more likely to actually rebalance under AIM than you are if you're left to manually manage the holdings. With manual management you have the added risk that you'll find reasons not to reduce something that has been winning or add to something that has relatively lagged/declined.
AIM is also 60-40 or 50-50 or 75-25 stock/cash based, which can achieve similar rewards to 100% all in. With 100% all in you run the risk that whatever price you paid for that stock will reflect the longer term rewards achieved from holding that stock. If you paid a high price then long term rewards can be dismal. Buy at the right time and rewards can be great. With 50-50 or whatever, if you overpaid initially likely you'll buy some more later at a lower price and cost average down the average cost of stock. If you bought in at a bargain then likely you'll sell some (profit take) and some of those gains might help counter another holding that was bought at a relatively high price.
If there's 50-50 chance of overpaying or buying cheaply a single stock/holding, you might hold one that achieves a 10% real (after inflation) gain and another that achieves a 0% real gain. For a combined average of a 5% real gain (assuming similar amounts invested in both). In contrast with AIM you're more likely to cost average both stocks towards a 5% midway overall average real gain.
Whilst leveraged funds might not be great investments and hide other risks (counter party swap risk etc.), I suspect that if used wisely then can help with cost-averaging by reducing downside risk, improving upside potential when compared like for like with 1x (such as holding 25% in a 2x instead of 50% in a 1x).