The AIC has published its latest list of ISA Millionaires showing how much you would have if you had put your full ISA allowance into a single investment company every year since 1999.
I’ve covered this list before, first in 2019 and then again in 2021, so a refresher seemed worthwhile especially as it gives me the opportunity to play with my new table-sorting widget (click on the column headers below).
Here’s the press release. There are now 30 companies that would have generated you £1 million. That’s up from 28 in 2021’s list and just 1 in 2019.
The figures go up to 25 February 2022 so they include the difficult start to the year for growth trusts but only the very beginning of the terrible events in Ukraine.
| Investment company | AIC sector | % return 6/4/99 to 25/2/22 | Annualised return | Total ISA value | Last year |
|---|---|---|---|---|---|
| HgCapital Trust | Private Equity | 3,450 | 16.9% | £2,062,931 | 8 |
| Scottish Mortgage | Global | 1,776 | 13.7% | £2,046,762 | 1 |
| Allianz Technology Trust | Technology & Media | 1,603 | 13.2% | £1,746,012 | 3 |
| Pacific Horizon | Asia Pacific | 3,210 | 16.5% | £1,726,154 | 4 |
| Polar Capital Technology | Technology & Media | 1,298 | 12.2% | £1,555,681 | 7 |
| Aberdeen Standard Asia Focus | Asia Pacific Smaller Companies | 3,606 | 17.1% | £1,399,197 | 16 |
| BlackRock Throgmorton Trust | UK Smaller Companies | 1,504 | 12.9% | £1,394,984 | 9 |
| BlackRock Smaller Companies | UK Smaller Companies | 1,353 | 12.4% | £1,313,361 | 12 |
| Montanaro European Smaller Companies | European Smaller Companies | 1,109 | 11.5% | £1,225,549 | 15 |
| Scottish Oriental Smaller Companies | Asia Pacific Smaller Companies | 3,222 | 16.5% | £1,201,039 | 25 |
| TR Property | Property Securities | 2,015 | 14.3% | £1,197,023 | – |
| 3i | Private Equity | 930 | 10.7% | £1,194,494 | – |
| Rights & Issues | UK Smaller Companies | 1,730 | 13.5% | £1,187,666 | 23 |
| Canadian General Investments | North America | 1,531 | 13.0% | £1,187,340 | – |
| abrdn UK Smaller Companies Growth | UK Smaller Companies | 724 | 9.7% | £1,165,308 | 21 |
| BlackRock World Mining Trust | Commodities & Natural Resources | 2,154 | 14.6% | £1,158,910 | – |
| Biotech Growth | Biotechnology & Healthcare | 1,315 | 12.3% | £1,124,071 | 2 |
| Worldwide Healthcare | Biotechnology & Healthcare | 1,932 | 14.1% | £1,120,001 | 11 |
| JPMorgan UK Smaller Companies | UK Smaller Companies | 1,294 | 12.2% | £1,102,772 | 19 |
| Invesco Perpetual UK Smaller Companies | UK Smaller Companies | 1,340 | 12.4% | £1,099,079 | – |
| Oryx International Growth | UK Smaller Companies | 842 | 10.3% | £1,092,604 | 14 |
| Mid Wynd International | Global | 1,155 | 11.7% | £1,078,848 | – |
| JPMorgan China Growth & Income | China / Greater China | 1,497 | 12.9% | £1,074,332 | 5 |
| JPMorgan European Discovery | European Smaller Companies | 1,692 | 13.4% | £1,063,440 | – |
| JPMorgan American | North America | 666 | 9.3% | £1,056,986 | – |
| International Biotechnology | Biotechnology & Healthcare | 1,658 | 13.3% | £1,039,390 | 13 |
| JPMorgan US Smaller Companies | North American Smaller Companies | 1,207 | 11.9% | £1,021,282 | 28 |
| Henderson Smaller Companies | UK Smaller Companies | 475 | 7.9% | £1,016,271 | – |
| Schroder AsiaPacific | Asia Pacific | 1,349 | 12.4% | £1,007,009 | 18 |
| The European Smaller Companies Trust | European Smaller Companies | 841 | 10.3% | £1,001,620 | – |
The calculations assume you invested your full ISA allowance on 6 April each year. So that means around £7k for the 2000s, jumping to £10k in 2010, £15k in 2014, and finally £20k from 2017. That’s a total investment of £266,650.
First up, the usual ‘survivorship bias’ warning for all such long-term performance tables. There are around 120 investment companies that predate 6 April 1999 so that means one in four of them make this list. Pretty much every trust that invests in alternative assets (property, debt, infrastructure, renewables etc) isn’t old enough to be included in this list.
However, there were around 330 investment companies in existence in the year 2000 (that’s the earliest figure I could find) so almost two-thirds of those have since fallen by the wayside. Many will have decided to cease operations, perhaps being rolled into another trust, or would have succumbed to a takeover or merger. So we are always working with incomplete data sets and should frame any conclusions accordingly.
Small wins big
The success of small-cap trusts sticks out for me once again with representatives from the UK, Europe, North America, and Asia Pacific. In fact, 14 of the 30 are small-cap trusts. Both the Global and Japan smaller-company sectors were also included in this list last year but the trusts concerned now dropped below the £1 million mark (they are Edinburgh Worldwide, Herald, and Baillie Gifford Shin Nippon).
Themed trusts like tech and biotech/healthcare are strongly represented as well and they always tend to dominate long-term performance tables like this. But themed trusts tend to give you a much wider range of potential returns along with a shed load of volatility along the way.
Only Scottish Mortgage and Mid Wynd make the list from the Global sector with Mid Wynd replacing Monks from the 2021 list.
TR Property and Invesco Perpetual UK Smaller rejoin the list, having appeared in 2019 and then dropping out in 2021. 3i is another notable new entry on the back of its impressive share price run due to its large position in Action, which has driven its returns for a number of years now. BlackRock World Mining makes a debut appearance, thanks to the recent resurgence of the commodity sector.
Notable fallers are Biotech Growth, Worldwide Healthcare, International Biotechnology, JPMorgan China Growth & Income, and Schroder Asia Pacific. While it was generally a bad year for healthcare trusts, Asia was a bit more mixed with Pacific Horizon holding onto the #4 position and Aberdeen Standard Asia Focus making impressive progress up the table.
Focusing on annualised returns
I have put in an annualised column for the total return since 1999 to make the long-term returns more relatable.
The way the ISA total is calculated favours trusts that had smaller gains in the 2000s but picked up the pace in the 2010s — as Scottish Mortgage did. But I like this way of measuring performance as assuming an investment each year tends to be a more accurate representation of how most people invest.
The annualised return numbers go from 7.9% for Henderson Smaller to 17.1% for Aberdeen Standard Asia Focus — a wider range than you would probably expect.
Four of these trusts managed to generate in excess of 15% annual returns over this almost 23-year period. I generally regard this level at the top end of what you can probably expect from a trust if you hold for multiple decades, although what happens to global stock market returns obviously has a bearing as well.
On a very rough basis for comparison purposes, I believe world markets have returned 8% per annum over this same period, UK markets about 5%, and UK inflation around 3%.
Sitting tight
It seems remiss not to reflect what’s happening in Ukraine. Like everyone else, I’ve been horrified by the events of the last week and while I’m hoping for a speedy and satisfactory resolution that seems ever more unlikely with each passing day.
The knock-on effects from this, on top of those from COVID, could be with us for a long, long time.
Higher energy/food prices and increased defence spending look a given. But we could see fewer interest rate rises than previously expected, Western democracies being brought closer together, and a faster shift toward renewables.
Portfolio-wise, as I plan to be fully invested for a few decades and generally avoid market timing, I haven’t made any changes as a result of what’s happened. But I may rebalance things a little at some point as a few have fallen further than others and/or seen their discounts widen.
Fortunately, I don’t think I had much if any exposure to Russian companies in the trusts that I own and my Vanguard global ETF had just 0.3% in Russia.
I’ll do a fuller portfolio review in early April.
Disclaimer
Please note that I may own some of the investments mentioned above -- you can see my current holdings on my portfolio page.
Nothing on this website should be regarded as a buy or sell recommendation as I'm just a random person writing a blog in his spare time and I am not authorised to give financial advice. Always do your own research and seek financial advice if necessary!
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Great list. Happy to be investing in TRY, BRSC and a few others from this list.
IT- How are you handling this correction? Selling anything?
This is my first real correction and so far I managed not to do anything stupid (didn’t sell anything) and bought some more RCP at the discount…
Hi M, sitting tight for now. I’m not one for big moves into or out of cash based on perceived market direction. And I tend to invest new money as and when I get it, rather than trying to finesse my entry points. I know some folks like to do things that way but I think it’s very hard to be consistently right with that approach — well, I certainly find it hard!
Luckily, I shouldn’t need to draw down my portfolio anytime soon so I can afford to be patient. That said, I might switch a few things around in due course if some of my holdings get bashed more than others for no obvious reason. Probably not going to consider that for a month or two at least though. We might have a little more clarity then but who knows.
Interesting to hear you say this is your first major correction. These are the times when you really learn — both about yourself and about investing in general.
Good approach, it is very hard to time the market consistently especially with funds. I do try to buy discounted funds but as this correction shows they can always widen their discount some more.
I am somewhat similar in that I’m fairly young so I don’t need to touch the portfolio for many decades. While it has not been fun to watch this happening but I’m using this to buy more at a discount. So far I think I have handled this correction well. Overall volatility is the price we pay for performance so this is to be expected… and there will be many more corrections in the next few decades.
Sounds like you’re approaching events with a pretty good mindset. There’s a lot more information on investing psychology around these days compared to back when I was getting started which is great to see.
And yes there will definitely be many more corrections!!