<p>The AIC has updated its annual list of ISA Millionaires, the number of trusts that would now be worth a million pounds if you had invested your full ISA allowance each year.</p>
<p><!--more--></p>
<p>ISAs began in 1999 when you could have invested £7,000 a year. The allowance remained the same for a decade before jumping to £10,200 in 2010, £15,000 in 2015, and £20,000 since 2017. There were a few, smaller inflation-linked increases along the way as well.</p>
<p>If you invested your full ISA allowance for each of the last 25 tax years, that comes to £306,560. So we are talking about a tripling of your contributions overall although the biggest contributions were in recent years and haven&#8217;t had as much time to grow.</p>
<h3>10% is the magic number</h3>
<p>If each of your annual contributions grew at a steady rate of 10% a year, then that would have generated a million pounds. That&#8217;s pretty much the long-term return for global markets as <a href="https://www.vanguardinvestor.co.uk/articles/latest-thoughts/investing-success/why-stock-market-returns-are-anything-but-average">this chart</a> from Vanguard, using the FTSE World index, indicates:</p>
<p><img class="alignnone wp-image-6274 size-full" src="https://www.itinvestor.co.uk/wp-content/uploads/2024/02/2024-02-14_11-00-37.png" alt="FTSE World annual returns " width="1010" height="500" /></p>
<p>But if we start in 1999, we are probably looking at nearer 7-8% for annual global market returns, so 10% represents a decent level of outperformance over the last 25 years. UK markets were probably closer to 5-6%, more than keeping up in the early stages but lacking the fitness to go the distance.</p>
<p>As I&#8217;ve said when reviewing previous versions of this list, I like this data as the pattern of contributions is similar to the way most people invest, i.e. regular amounts increasing steadily over time, so it helps to weed out those that had strong early performance followed by lacklustre returns over a longer period of time.</p>
<h3>The 32 ISA Millionaires</h3>
<p>Here&#8217;s the list of 32 trusts that the AIC&#8217;s data boffins reckon made the cut as of 31 January 2024. I&#8217;ve shown the total share price return and the annualised equivalent to give a better sense of the rate of returns over time. As usual, the column headers are sortable if you want to play with the data.</p>
<table id="iti" class="tablesorter {sortlist: [[6,1]]}">
<thead>
<tr>
<th>Rank</th>
<th>Trust name</th>
<th>AIC sector</th>
<th>Share price total return Apr 99 to Jan 24</th>
<th>Annualised total return Apr 99 to Jan 24</th>
<th>Total ISA value as of Jan 24</th>
</tr>
</thead>
<tbody>
<tr>
<td>1</td>
<td>HgCapital</td>
<td>Private Equity</td>
<td>3,700%</td>
<td>15.8%</td>
<td>£2,254,391</td>
</tr>
<tr>
<td>2</td>
<td>Allianz Technology</td>
<td>Technology</td>
<td>1,894%</td>
<td>12.8%</td>
<td>£2,095,955</td>
</tr>
<tr>
<td>3</td>
<td>Polar Capital Technology</td>
<td>Technology</td>
<td>1,573%</td>
<td>12.0%</td>
<td>£1,912,656</td>
</tr>
<tr>
<td>4</td>
<td>Scottish Mortgage</td>
<td>Global</td>
<td>1,366%</td>
<td>11.4%</td>
<td>£1,639,261</td>
</tr>
<tr>
<td>5</td>
<td>Scottish Oriental Smaller Companies</td>
<td>Asia Pacific Smaller Companies</td>
<td>4,024%</td>
<td>16.2%</td>
<td>£1,538,589</td>
</tr>
<tr>
<td>6</td>
<td>abrdn Asia Focus</td>
<td>Asia Pacific Smaller Companies</td>
<td>3,742%</td>
<td>15.8%</td>
<td>£1,491,435</td>
</tr>
<tr>
<td>7</td>
<td>JPMorgan American</td>
<td>North America</td>
<td>889%</td>
<td>9.7%</td>
<td>£1,413,500</td>
</tr>
<tr>
<td>8</td>
<td>Pacific Horizon</td>
<td>Asia Pacific</td>
<td>2,334%</td>
<td>13.7%</td>
<td>£1,303,270</td>
</tr>
<tr>
<td>9</td>
<td>JPMorgan Global Growth &; Income</td>
<td>Global Equity Income</td>
<td>923%</td>
<td>9.8%</td>
<td>£1,268,898</td>
</tr>
<tr>
<td>10</td>
<td>BlackRock Throgmorton</td>
<td>UK Smaller Companies</td>
<td>1,252%</td>
<td>11.1%</td>
<td>£1,214,138</td>
</tr>
<tr>
<td>11</td>
<td>Worldwide Healthcare</td>
<td>Biotechnology &; Healthcare</td>
<td>1,999%</td>
<td>13.0%</td>
<td>£1,197,232</td>
</tr>
<tr>
<td>12</td>
<td>International Biotechnology</td>
<td>Biotechnology &; Healthcare</td>
<td>1,846%</td>
<td>12.7%</td>
<td>£1,194,730</td>
</tr>
<tr>
<td>13</td>
<td>Fidelity European</td>
<td>Europe</td>
<td>1,725%</td>
<td>12.4%</td>
<td>£1,188,448</td>
</tr>
<tr>
<td>14</td>
<td>Biotech Growth</td>
<td>Biotechnology &; Healthcare</td>
<td>1,317%</td>
<td>11.3%</td>
<td>£1,169,361</td>
</tr>
<tr>
<td>15</td>
<td>Canadian General Investments</td>
<td>North America</td>
<td>1,439%</td>
<td>11.6%</td>
<td>£1,159,765</td>
</tr>
<tr>
<td>16</td>
<td>BlackRock Smaller Companies</td>
<td>UK Smaller Companies</td>
<td>1,138%</td>
<td>10.7%</td>
<td>£1,157,120</td>
</tr>
<tr>
<td>17</td>
<td>Mid Wynd International</td>
<td>Global</td>
<td>1,182%</td>
<td>10.8%</td>
<td>£1,142,541</td>
</tr>
<tr>
<td>18</td>
<td>Rights &; Issues</td>
<td>UK Smaller Companies</td>
<td>1,588%</td>
<td>12.1%</td>
<td>£1,134,352</td>
</tr>
<tr>
<td>19</td>
<td>JPMorgan UK Smaller Companies</td>
<td>UK Smaller Companies</td>
<td>1,268%</td>
<td>11.1%</td>
<td>£1,123,473</td>
</tr>
<tr>
<td>20</td>
<td>European Smaller Companies</td>
<td>European Smaller Companies</td>
<td>906%</td>
<td>9.7%</td>
<td>£1,112,995</td>
</tr>
<tr>
<td>21</td>
<td>JPMorgan European Discovery</td>
<td>European Smaller Companies</td>
<td>1,664%</td>
<td>12.3%</td>
<td>£1,087,689</td>
</tr>
<tr>
<td>22</td>
<td>JPMorgan US Smaller Companies</td>
<td>North American Smaller Companies</td>
<td>1,238%</td>
<td>11.0%</td>
<td>£1,086,589</td>
</tr>
<tr>
<td>23</td>
<td>Herald</td>
<td>Global Smaller Companies</td>
<td>855%</td>
<td>9.5%</td>
<td>£1,077,135</td>
</tr>
<tr>
<td>24</td>
<td>JPMorgan Indian</td>
<td>India/Indian Subcontinent</td>
<td>1,778%</td>
<td>12.5%</td>
<td>£1,076,331</td>
</tr>
<tr>
<td>25</td>
<td>Montanaro European Smaller Companies</td>
<td>European Smaller Companies</td>
<td>917%</td>
<td>9.8%</td>
<td>£1,066,051</td>
</tr>
<tr>
<td>26</td>
<td>ICG Enterprise</td>
<td>Private Equity</td>
<td>580%</td>
<td>8.0%</td>
<td>£1,065,553</td>
</tr>
<tr>
<td>27</td>
<td>AVI Global</td>
<td>Global</td>
<td>1,482%</td>
<td>11.8%</td>
<td>£1,058,026</td>
</tr>
<tr>
<td>28</td>
<td>Fidelity Asian Values</td>
<td>Asia Pacific Smaller Companies</td>
<td>806%</td>
<td>9.3%</td>
<td>£1,055,507</td>
</tr>
<tr>
<td>29</td>
<td>BlackRock World Mining</td>
<td>Commodities &; Natural Resources</td>
<td>1,853%</td>
<td>12.7%</td>
<td>£1,037,056</td>
</tr>
<tr>
<td>30</td>
<td>Pantheon International</td>
<td>Private Equity</td>
<td>1,017%</td>
<td>10.2%</td>
<td>£1,027,265</td>
</tr>
<tr>
<td>31</td>
<td>F&;C</td>
<td>Global</td>
<td>681%</td>
<td>8.6%</td>
<td>£1,007,460</td>
</tr>
<tr>
<td>32</td>
<td>Henderson European Focus</td>
<td>Europe</td>
<td>745%</td>
<td>9.0%</td>
<td>£1,005,182</td>
</tr>
</tbody>
</table>
<p>I reckon 128 trusts have been listed for 25 years, so this list of 32 represents a quarter of those. If we assume the number of trusts available to buy back in 1999 was about the same as it is now, then we are looking at 32 out of around 400, so that&#8217;s less than a tenth.</p>
<p>Of course, a lot of less successful trusts have been merged into more successful ones over the years. Based on money invested, as an estimated &#8216;survival rate&#8217; we are looking at somewhere between a quarter and a tenth. It&#8217;s hard to be more precise than that without having the full data set and the time and skill to crunch the numbers.</p>
<p>You&#8217;ll notice that the list is nearly all equity trusts as that&#8217;s because most alternative trusts are less than twenty years old. Of the existing trusts that were launched before April 1999, five were private equity, eight were in the Flexible sector, twelve were VCTs, and there is one property and one debt trust. Of these, three out of five private equity trusts make the list and it probably should be four out of six as the AIC list excludes 3i, but there&#8217;s nothing from the other sectors.</p>
<p>3i was included in the list previously but seems to have been omitted both this year and last year. As it is up around 50% over the last twelve months and had a total value of £1.2m in the 2022 list, I suspect it would be near the top if it was included.</p>
<h3>Small is beautiful, once again</h3>
<p>As the AIC release noted, 12 of the 32 have a small-cap focus and they are spread across all the small-cap sub-sectors except Japanese Smaller Companies. The mainstream Japan sector is also absent, as although Japanese equities have performed well over the last decade, they would have lost you money before then.</p>
<p>China is another notable absentee &#8212; three of the four China trusts were around in 1999 but I believe only one of them has been focused on China throughout with the other two initially having a wider regional focus.</p>
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<p>India appears in the guise of JPMorgan Indian but the other three Indian trusts are too young for this list.</p>
<p>But I think the more general takeaway here is that there have been good-performing trusts across most regions and in trusts that invest in both large and small companies and also in unquoted ones. Each sector or region will have its time in the sun but over the very long run, things often even out.</p>
<p>From a personal point of view, I own five of those listed but there are six others that I used to own in the late 1990s that I sold out of a long time ago and where I wish I had been more patient. As the late, great Charlie Munger was fond of saying, it&#8217;s your sitting still on an investment that makes you money.</p>
<p>I&#8217;ve looked at nearly all these trusts in my fund profiles on this site or <a href="https://money-makers.co/">Money Makers</a> but I can see four that I haven&#8217;t covered yet that I plan to add to my &#8216;to-do&#8217; list.</p>
<h3>How the list has changed over time</h3>
<p>If you want to look at past lists, here are links to my previous articles or the original AIC press release:</p>
<ul>
<li><a href="https://www.theaic.co.uk/aic/news/press-releases/isa-millionaires">2023 (28 £1m companies)</a></li>
<li><a href="https://www.itinvestor.co.uk/2022/03/30-isa-investment-company-millionaires/">2022 (30 £1m companies)</a></li>
<li><a href="https://www.itinvestor.co.uk/2021/04/the-28-investment-trust-isa-millionaires/">2021 (28 £1m companies)</a></li>
<li>2020 &#8212; no list produced</li>
<li><a href="https://www.itinvestor.co.uk/2019/03/isa-millionaires/">2019 (1 £1m company)</a></li>
</ul>
<p>It&#8217;s interesting to see that the number of £1m companies hasn&#8217;t changed much over the last three years, although there was a massive jump between 2019 and 2021. Trusts saw discounts widen during 2023, although equity trusts to a lesser degree than alternatives, so that&#8217;s why the numbers only increased a little in this year&#8217;s list despite what was (eventually) a good year for global markets.</p>
<p>The individual trusts on the last few lists haven&#8217;t changed very much at all and I&#8217;d say they represent a pretty good shortlist of trusts to choose from. Private equity appears to be creeping up the ranks while a few of the gr0wth-dominated trusts run by Baillie Gifford and the out-of-favour UK Smaller Companies sector have slipped down or off the table.</p>
<p>Let&#8217;s hope there&#8217;s another list produced in early 2025 and that we see several more companies join the £1m club.</p>
 
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<p>Please note that I may own some of the investments mentioned above -- you can see my current holdings on <a href="https://www.itinvestor.co.uk/portfolio/">my portfolio page</a>. </p>
<p>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!</p>
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Fascinating stuff. Ever harder to remember to think long-term!
Particularly interested by the temporal skew e.g. Scottish Oriental, which has best results overall, but because the past 10 years or so have been hum-drum, have produced lower returns overall, as the pot was larger then.
I am an Asia fan, so am senstive to this as it's been a painful decade. In contrast, I imagine that 10 years ago the Tech Trust performances wouldn't look so hot (think that's when MSFT reached a new high?).
Also amazing that HGT on a 17% discount again despite such stellar results.