Do you have any investments in any of the 50 investment trusts that could have helped investors accumulate a million-pound portfolio over the course of 25 years?
Increasing your annual ISA allowance can be a fantastic way to increase your wealth, and within 25 years, many of the best-performing investment trusts will have made devoted investors millionaires.
As the end of the tax year draws near, investors will be searching for the best places to invest their ISA funds. For many, becoming an ISA millionaire is the ultimate financial goal.
According to research conducted by the Association of Investment Companies (AIC), if investors had invested their entire annual ISA allowance in 50 investment trusts between 1999 and 2024, they would have made over £1 million.
If they had invested in and reinvested dividends with any of the top four performersAllianz Technology Trust, HgCapital Trust, Polar Capital Technology, and Scottish Mortgageinvestors might even be sitting on a sum worth more than £2 million.
For a 326,560 investment over 25 years, that is not bad.
The best investment trusts listed below have contributed to the ISA millionaire status of investors.
Despite ongoing investor concerns about discounts to net asset value (NAV), investment trusts frequently make it onto best buy lists, and those who have stuck with them over time are reaping the rewards.
Among the top-performing trusts, technology and the United States are prominent themes, which may come as no surprise considering the dominance of the Magnificent Seven.
Over a 25-year period, investing in a global portfolio of technology companies, Allianz Technology Trust and Polar Capital Technology yielded returns of 2,936,182 and 2,696,343, respectively.
2,789,473 was returned by HgCapital Trust, an investment firm that makes investments in unquoted software and technology services companies.
Returning 2,335,775 was Scottish Mortgage, a global trust with a growth-oriented mandate.
JPMorgan American, which yielded 1,902,265 in return, also primarily invests in North American quoted companies, which are home to many of the leading tech stocks.
Of the 50 "ISA millionaire" investment trusts, 14 concentrate on smaller businesses.
The sixth-performing "ISA millionaire" trust, Asia Focus, which yielded 1,792,184, is one of three investment trusts from the Asia Pacific Smaller Companies sector.
Three more come from the category of European Smaller Companies, with Montanaro European Smaller Companies returning 1,302,101, the best-performing of these.
JPMorgan UK Small Cap Growth & Income is the best-performing trust among the five in the UK Smaller Companies sector, with a return of 1,278,186.
"The long-term strategy of investment trusts has produced impressive results for investors over time," says Annabel Brodie-Smith, the AIC's director of communications.
"Investment trusts can adopt a long-term perspective and are never forced sellers due to their permanent capital structure. This makes them ideal for assets that are difficult to sell, such as smaller businesses and unquoted companies.
Over the course of more than 155 years, Brodie points out that investment trusts have managed a number of crises, including the financial crisis, the .com boom and bust, two world wars, and the pandemic.
"The structure of investment trusts offers a compelling approach for investors seeking to build long-term wealth in the face of economic uncertainty," she continues, "even though past performance is no guarantee of future returns.
According to our research, if ISA savers had invested their entire allowance annually since 1999, 50 investment trusts would have returned more than £1 million, with four of them returning more than £2 million.
"I would like to emphasize how important it is to spread your risk when investing. The best strategy for long-term success is to have a diverse portfolio of investment trusts and other assets that suit your needs.
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