Savers could have become “ISA millionaires” if they had invested in one of 32 investment trusts over the past few decades, with two trusts reaching more than £2 million, according to new figures.
The data is based on investors putting their entire ISA allowance into one of the trusts every year from 1999, the year ISAs were launched, to 2023 - a total of £306,560 - and reinvesting the dividends.
According to the Association of Investment Companies (AIC), HgCapital Trust was the top performer, generating a massive tax-free pot of £2,254,391.
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Allianz Technology Trust also produced an ISA worth more than £2 million - £2,095,955 to be precise.
Tech-focused trusts and smaller companies trusts are prominent among the 32 ISA millionaire investment trusts.
Annabel Brodie-Smith, communications director at the AIC, says the research highlights the importance of investing for the long term.
However, she adds that it’s “vital to spread your risk, as no-one knows which will be the best-performing investment trusts in the future. A diversified portfolio which meets your needs is the best way to success over the long term.”
We reveal which investment trusts could have made you an ISA millionaire.
The ISA millionaire investment trusts
Technology is a strong theme among the top three trusts. HgCapital Trust, which invests in unquoted software and technology services businesses, returned £2,254,391. Allianz Technology Trust and Polar Capital Technology, which both invest in a global portfolio of technology companies, returned £2,095,955 and £1,912,656 respectively.
Scottish Mortgage, a global trust with a growth-focused mandate, took fourth place, producing an ISA worth £1,639,261. Scottish Oriental Smaller Companies came fifth, returning £1,538,589.
Two of the top five performers – HgCapital Trust and Scottish Mortgage – invest at least part of their portfolio in unquoted companies.
Among the 32 ISA millionaire investment trusts, 12 focus on smaller companies. Four of them are from the UK Smaller Companies sector with BlackRock Throgmorton Trust performing best of these, returning £1,214,138 to take 10th place in the table.
Three of the trusts are from the Asia Pacific Smaller Companies sector, of which the best performing is Scottish Oriental Smaller Companies. A further three are from the European Smaller Companies sector, of which European Smaller Companies is the best performing, returning £1,112,995.
| Rank | Trust | AIC sector | % share price total return, 06/04/1999 to 31/01/2024 | Total ISA investment value at 31/01/2024 |
|---|---|---|---|---|
| 1 | HgCapital Trust | Private Equity | 3,700 | £2,254,391 |
| 2 | Allianz Technology Trust | Technology & Technology Innovation | 1,894 | £2,095,955 |
| 3 | Polar Capital Technology | Technology & Technology Innovation | 1,573 | £1,912,656 |
| 4 | Scottish Mortgage | Global | 1,366 | £1,639,261 |
| 5 | Scottish Oriental Smaller Companies | Asia Pacific Smaller Companies | 4,024 | £1,538,589 |
| 6 | abrdn Asia Focus | Asia Pacific Smaller Companies | 3,742 | £1,491,435 |
| 7 | JPMorgan American | North America | 889 | £1,413,500 |
| 8 | Pacific Horizon Investment Trust | Asia Pacific | 2,334 | £1,303,270 |
| 9 | JPMorgan Global Growth & Income | Global Equity Income | 923 | £1,268,898 |
| 10 | BlackRock Throgmorton Trust | UK Smaller Companies | 1,252 | £1,214,138 |
| 11 | Worldwide Healthcare Trust | Biotechnology & Healthcare | 1,999 | £1,197,232 |
| 12 | International Biotechnology | Biotechnology & Healthcare | 1,846 | £1,194,730 |
| 13 | Fidelity European Trust | Europe | 1,725 | £1,188,448 |
| 14 | Biotech Growth Trust | Biotechnology & Healthcare | 1,317 | £1,169,361 |
| 15 | Canadian General Investments | North America | 1,439 | £1,159,765 |
| 16 | BlackRock Smaller Companies | UK Smaller Companies | 1,138 | £1,157,120 |
| 17 | Mid Wynd International | Global | 1,182 | £1,142,541 |
| 18 | Rights & Issues Investment Trust | UK Smaller Companies | 1,588 | £1,134,352 |
| 19 | JPMorgan UK Smaller Companies | UK Smaller Companies | 1,268 | £1,123,473 |
| 20 | European Smaller Companies | European Smaller Companies | 906 | £1,112,995 |
| 21 | JPMorgan European Discovery | European Smaller Companies | 1,664 | £1,087,689 |
| 22 | JPMorgan US Smaller Companies | North American Smaller Companies | 1,238 | £1,086,589 |
| 23 | Herald Investment Trust | Global Smaller Companies | 855 | £1,077,135 |
| 24 | JPMorgan Indian | India/Indian Subcontinent | 1,778 | £1,076,331 |
| 25 | Montanaro European Smaller Companies | European Smaller Companies | 917 | £1,066,051 |
| 26 | ICG Enterprise Trust | Private Equity | 580 | £1,065,553 |
| 27 | AVI Global Trust | Global | 1,482 | £1,058,026 |
| 28 | Fidelity Asian Values | Asia Pacific Smaller Companies | 806 | £1,055,507 |
| 29 | BlackRock World Mining Trust | Commodities & Natural Resources | 1,853 | £1,037,056 |
| 30 | Pantheon Internationa | Private Equity | 1,017 | £1,027,265 |
| 31 | F&C Investment Trust | Global | 681 | £1,007,460 |
| 32 | Henderson European Focus Trust | Europe | 745 | £1,005,182 |
Source: www.aic.co.uk / Morningstar. % share price total return is for a single lump sum invested at the beginning of the period. Total ISA investment value is the total value of an investment on 31/01/2024 if the maximum ISA limit for each year had been invested annually from 1999 to 2023, with the investment being made on 6 April each year.
Brodie-Smith comments: “It’s been a challenging time for investors recently, with high inflation coupled with geopolitical tensions and an uncertain outlook.
“In difficult times, it’s important for investors to take a long-term approach to their investments. Investment trusts have been in existence for more than 155 years, surviving two World Wars, the Great Depression, the 1970s era of high inflation, the tech boom (and bust), the financial crisis and the pandemic.
“They have a fixed pool of capital, which means investment trust managers can take a long-term view, holding onto assets during market downturns, rather than being forced to sell them at cheap prices.”
Jim Strang, chairman of HgCapital Trust, said it was “very heartening that the company has been able to deliver such compelling gains for shareholders over the last 25 years”. He said the investment performance was a “solid endorsement of the private equity model”.
Mike Seidenberg, portfolio manager of Allianz Technology Trust, called the gains “fantastic”. He said: “As we often remind investors, we are arguably living in the golden era of technology where companies across most industries become relevant or irrelevant depending on their adoption and use of technology.”
