Jackpot!

If you had invested each year’s maximum ISA limit in the top performing investment trust Aberdeen New Thai (LSE: ANW) from 1999 to 2018, you would now have a cool million (and a bit). You would have invested £206,560 in total, and the trust would have turned into a staggering £1,070,583.

No investment trust has done it better over the period, although others have given it a go. Scottish Oriental Smaller Companies (LSE: SST) would have turned the same money into £956,981. Not quite a million, although I doubt investors will be complaining.

Hindsight millionaires

Past performance figures are slippery things. Everybody would be a multi-millionaire if they had the benefit of perfect hindsight, but none of us do. However, these figures still show how your wealth can grow, if invested wisely for the long term.

So should you buy Aberdeen New Thai today? As you can imagine with a country-specific fund like this, it comes down to how well you expect the Thai economy to perform. You won’t be surprised to hear that it has been volatile. Twenty years ago Thailand was still reeling from an economic boom that had ended in bust during the 1997 Asian crisis.

Thai trap

This left it with large account deficit, exhausted foreign currency reserves, a slumping currency and inflation of 10%. As so often happens, the perfect time to invest was immediately after a meltdown, when assets could be picked up cheaply.

Today, Thailand generates two thirds of its GDP from exports and this is a worry with the global economy on the brink of recession. If regional powerhouse China slumps, Aberdeen New Thai could follow. Thailand is still battling to escape the middle income trap, which won’t be easy with half the workforce employed in agriculture, while the country is also ageing. You might want to invest a small corner of your portfolio, but not enough to make you a million.

The Scottish play

Scottish Oriental Smaller Companies invests mainly in smaller quoted companies in Asia, which includes the Indian subcontinent but excludes Japan and Australasia. I should declare an interest here, I bought it around 15 years ago. Sadly, I was a newbie investor then and only invested £1,803, so although it has grown 214% since then, my £5,661 holding is well short of a million. Dream meets reality, again.

Sadly, while strong over 20 years, it hasn’t been such a good hold for the last five, during which time it grew just 35%, less than half the 80% growth of its Asia-Pacific benchmark. That makes the fund hard to recommend for new investors. In fact I’m wondering whether to sell.

Don’t despair, because there are plenty of promising investment trusts out there. Here are 2 income investment trusts to consider. While these two could form the basis of a good starter portfolio. There is more than one way to crack that million.

The post These 2 investment trusts could have made you a stocks and shares ISA millionaire! appeared first on The Twelfth Magpie.

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Harvey Jones owns shares of Scottish Oriental Smaller Companies Trust. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Thanks a million

Making a million from investing is easier if your investments can roll up free of tax, so make good use of your £20,000 tax-free ISA allowance before it expires at midnight on 5 April.

Somebody who had invested their maximum stocks and shares ISA limit every year since the scheme launched in April 1999 will so far have contributed £186,560. If they had invested that in the average investment trust every year, they would now have a pot of £436,894, a whopping £250,334 gain in less than 20 years!

Thai me

Some funds have done far better, with the very best being Aberdeen New Thai (LSE: ANW). It’s a lesser-known specialist trust with an NAV of 677p per ordinary share with a market cap of c.£95 million that invests 100% in Thai equities. The trust, listed in the Country Specialists: Asia Pacific sector, would have turned your ISA payments into a cool £1,050,638, more than five times your original investment, according to research from the Association of Investment Companies (AIC), using Morningstar data.

Despite this, the trust trades at a large discount of -15%. My own research shows that recent performance has been less spectacular, with the fund up just 21.4% over the last five years, according to Trustnet.com, against sector growth of 110.4%. This is less than surprising given recent political upheavals, which saw the Thai army seize power in a coup in 2014. Current uncertainty may make it a good time to invest, depending on where you think Thailand is heading now.

Japan calling

Baillie Gifford Shin Nippon (LSE: BGS) — in the Japanese Smaller Companies sector — is the next investment trust millionaire maker, turning maximum ISA contributions into £986,344. In contrast to Aberdeen New Thai, the last five years have been a dream, returning an incredible 261.1% against 150.8% across its sector, Trustnet shows.

Success comes at a price. In this case, a massive premium of 9.84% to underlying NAV. But if you think the Japanese recovery has further to run, this £861m NAV trust could be the place to start.

The third millionaire maker (give or take £37,034) came as a surprise to me. Acorn Income Fund (LSE: AIF), in the UK Equity & Bond Income sector, delivered the third highest return on any investment trust at £962,966. This little-known offering from Premier Fund Managers, which has a NAV of just £441m, aims to provide high income from a portfolio of small- and mid-cap companies, plus capital growth. It currently yields 4.18%.

Mighty oaks

The trust targets companies under a £1bn market-cap with experienced management, sound operational controls, good cash generation and a progressive dividend. Recent performance has been strong, with growth of 88.3% over five years against 60.6% across its sector. It’s also trading at a premium, this time 5.87%.

As ever, past performance is no guarantee of future returns, but all three trusts have an impressive track record. Good luck with that million!

The post These 3 investment trusts are creating ISA millionaires! appeared first on The Twelfth Magpie.

More reading

• Why Barclays shares could have a huge second half of 2026
• Back below 500p, is it time to consider BP shares again?
• Is there any value left in Lloyds shares now they’re over £1?
• How much would I need in a Stocks and Shares ISA to target £19,036 a year in second income?
• After huge new nuclear deals, are Rolls-Royce’s sub-£15 shares set to power higher?

Harvey Jones has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.