This Saturday is the 25th anniversary of the launch of individual savings accounts, and for any last-minute investors it will be one day too late as the window for the current ISA season slams shut on Friday.
To celebrate, and maybe provide some ideas for investors finding it hard to pick what to put in their stocks and shares ISAs, we share the best performing investment trusts for the past quarter of a century.
Below we share the best performing trusts over the past 25 years, plus the best and worst performing trusts in the first quarter.
The latest performance stats show that technology and global investment trust sectors were carrying the most momentum into the start of April.
Conversely for contrarian investors who see value where others fear to tread, renewable energy trusts, hedge funds, infrastructure and property are the investment trust sectors were the most out of favour in the first quarter of the year, with their discounts to net asset value widening the most.
Best trusts over the past 25 years
This list is compiled with the help of the AIC, based on those that are members of the trade body (so excluding 3i Group PLC (LSE:III) for one notable instance).
Based on a single investment of the full £7,000 ISA allowance on 6 April 1999, the day ISAs came into existence, with dividends reinvested until 5 March 2024, 18 investment trusts would have returned over £100,000.
The table also includes the performance of these 25 companies with an initial investment of £20,000, the current ISA limit.
Three of the top performers are focused on Asia, two of the top 10 are biotech-focused, and seven of the total invest only in small caps.
Top of the tree is Scottish Oriental Smaller Companies Trust PLC, where the current portfolio has almost 40% in Indian companies., 14% in Indonesia and 13% in China.
Third is another focused on the same region, abrdn Asia Focus PLC, where the split is 19% India, 12% Indonesia, 12% Taiwan and 12% China.
Including second-placed HgCapital Trust (LSE:HGT), which invests in unquoted companies, all three would have generated a tax-free pot of over £250,000 from a £7,000 ISA investment.
Source: theaic.co.uk / Morningstar. Includes AIC member investment trusts. Returns are share price total returns for a single lump sum invested on 06/04/1999, with dividends reinvested and held until 05/03/2024.
Best performing trusts
The best performing trust in the first quarter was Manchester & London (+22%), which was also the largest riser over 2023, according to broker Stifel, which compiled the list, thanks to Microsoft and Nvidia together making up more half of the portfolio.
Other funds on the top risers list were Polar Capital Technology (+16%), Allianz Technology (+15%), and JPMorgan American (+15%).
Baillie Gifford US Growth (+12%) was a new addition, with Stifel noting that the backdrop “improving for its growth-focused portfolio and perhaps the appearance of Elliott on the register of sister trust Scottish Mortgage highlighted value”.
CC Japan Income & Growth (+15%) continued to benefit from a rising Japanese market after a good 2023, while Polar Capital Global Healthcare (+14%) benefitted from the sizeable biotech re-rating since November.
Second on the list was Chenavari Toro Income Fund (+21%), with Stifel putting this down to “the improving chances of a soft landing led to investors adding risk across the capital stack, helping CLO spreads tighten”.
One of Stifel’s top picks for 2024, Taylor Maritime (+19%), gained momentum in March with some discount narrowing following more asset sales as well as insider buying. Sector peer Tufton Oceanic (+13%) also performed well.
Finally, abrdn Private Equity Opps (+16%) was a notable riser as its discount tightened from 39% to 28%, helped by the introduction of a share buyback facility.
Worst performances
Fallers continued to be dominated by the renewables and battery storage trusts, many of which have high yields and strong dividend cover, so could be a prime source for income- and value-hunting investors.
Battery Storage was the worst affected, with Stifel noting revenues in the British market remaining “heavily subdued”, with Gresham House Energy (-62%) by far the largest faller, followed by Gore Street Energy (-25%).
Renewable funds fell against a backdrop of weaker power prices, despite prices remaining much higher than they were pre-pandemic when these trust traded for chunky premiums to NAV.
Top fallers were NextEnergy Solar (-20%), Octopus Renewables (-19%), Foresight Solar (-16%), Bluefield Solar (-14%), Greencoat Renewables (-13%), US Solar (-12%), and TRIG (-10%).
D9 Infrastructure (- 25%) endured another difficult quarter, including a regulatory probe of an asset sale, board resignations and “surprising” implied valuations, said Stifel.
Its better performing peer Cordiant (-16%) also fell as its discount rose from 32% to 43%, “potentially affected by poor sentiment towards the digital infra space”.