The best-performing stocks and shares ISAs over 25 years

ISAs (individual savings accounts) turned 25 this year after launching back in 1999 - and they have aged well for many savers and investors. 

The tax-free savings accounts started with a £7,000 allowance, which was eventually increased to £20,000 in 2017. The introduction of ISAs included traditional cash ISAs and stocks and shares ISAs. There are now junior ISAs, lifetime ISAs and innovative finance ISAs to choose from too.

The total ISA market is worth a massive £741.6 billion.

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Sarah Coles, head of personal finance at Hargreaves Lansdown, says: “The ISA has come a long way in 25 years. In the early days, when investors were still lamenting the loss of their predecessors – TESSAs and PEPs - few would have predicted ISAs would become a vital cornerstone of millions of portfolios, attracting cash from around 12 million people annually, and saving us an incredible £6.7 billion tax in a year.”

The latest HMRC data reveals that £66.9 billion was paid into 11.8 million ISAs in 2021/22. Almost two-thirds (61%) of those were cash ISAs.

In total, there are 22.2 million adult ISAs. The average ISA value is £29,387.

According to Hargreaves Lansdown, if you invested £1,000 into a cash ISA in April 1999 when ISAs first launched, it would be worth £1,879 based on a typical rate of interest (as at April 2024). If you invested £1,000 in a global tracker fund within a stocks and shares ISA, it would be worth £5,293.

With this in mind, we reveal the best-performing funds and investment trusts over the past 25 years - and what they would be worth now.

Best-performing stocks and shares ISAs

We asked Hargreaves Lansdown for the top-performing funds and investment trusts since April 1999, and to show how much an ISA customer could be sitting on if they had invested £1,000 back then.

Source: Hargreaves Lansdown using data from Lipper. Returns are from 06/04/1999 to 06/04/2024

The figures show that the biggest returns came from investment trusts. Someone who had invested £1,000 in HGCapital Trust, a private equity trust, back in 1999 would now be sitting on more than £40,000. 

The second-best return came from Scottish Oriental Smaller Companies, while abrdn Asia Focus came third.

In the open-ended fund space, IFSL Marlborough Special Situations posted the best performance over 25 years, with a 2,521% return. Abrdn SICAV I - Indian Equity took the second spot, followed by HSBC GIF Indian Equity.

Anyone who had invested in these funds and trusts with an ISA back in 1999 would have been very lucky to have got such sparkling results - and would have had to deal with a fair amount of volatility along the way. Investing in sectors like smaller companies and private equity, and regions like India and the rest of Asia, can be risky.

Hargreaves Lansdown advises that investors shouldn't lose sleep over the growth they've missed, adding: "Instead, it’s worth looking to the future, and taking advantage of ISAs now. The right assets and approaches will depend on your circumstances and objectives, but these figures show that if you’re putting money away for the long term, it’s well worth considering a stocks and shares ISA.”