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.

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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.

HG Sauce

HG Capital Trust (LSE: HGT) gives you exposure to a fast-growing portfolio of more than 30 unquoted investments, primarily in technology and technology-enabled services across Europe, plus two renewable energy funds. This is a racy remit and HG aims to deliver a return in excess of the FTSE All-Share over the longer run. It has delivered in style, with a historic return of 1.6 times the index, and long-term annual compound growth of 10.4% a year over the last decade.

Last month, HG Capital Trust posted a 12.1% rise in net asset value in the six months to 31 August against 5.5% on the All-Share. Today’s update shows the share price rising a meaty 16.9% over the past 12 months. It now has £674m under management and a market cap of £609m, which leaves it trading at an attractive 9.6% discount to net asset value.

In Capital we Trust

Even investors who like to make their own direct equity choices should consider a trust like this, because it gives you a broad spread of under-the-radar stocks. HG is a private equity firm that targets middle-market buyouts primarily in European technology, media and telecomunications. Top holdings include Visma, IRIS, Sovos Compliance, CogitalGroup, Mitratech and other relative minnows. The fund is 50% invested in the UK, but also has 19% exposure to Scandinavia, as well as Northern Europe and the US.

On a cumulative basis, this fund will have more than doubled your money over five years, according to TrustNet.com. It also offers a dividend yield of 3.65%, which is attractive. This is a very nice portfolio diversifier that has proven its merits over the longer run.

Big in Japan

For further diversification, have you considered Japan? After a long, cold winter Japan-focused funds have been making hay in the rising sun, and few more so than Baillie Gifford Japan Trust (LSE: BGFD). Over five years, it has produced a cumulative return of 275%, Trustnet shows, while its benchmark Japan Equities index returned ‘only’ 175% over the same period.

Perhaps this is to be expected, given that the trust invests in medium-to-smaller-sized Japanese companies, which will often outpace the wider market during strong growth periods. But it still opens up an exciting new area that many investors may have overlooked. Latest performance figures for the year to 31 August are hugely impressive. During this time, the trust’s net asset value rose 27.6%, while the benchmark index gained 18.8%. In this period the company’s share price increased a thumping 37.5%.

There are a few potential hiccups. The fund has been managed by Sarah Whitley since 1991, but she is due to retire in April after 27 years. Also, it trades at a premium of 4.51%, a tribute to its recent stonking growth. Finally, you are coming late to the Japanese recovery party, which cannot go on forever. However, Baillie Gifford Japan Trust still looks a great way to plug any regional gap in your portfolio.

The post 2 fast-growing investment trusts I’d buy to turbo-charge my pension appeared first on The Twelfth Magpie.

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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.

If you’re unsure of which investment trusts to consider, then you might want to start out by taking a look at these top-performing trusts.

Long-term growth

For investors looking for long-term growth, I reckon the Lindsell Train Investment Trust (LSE: LTI) is worth a closer look. Shares in the investment trust have delivered a total return of 241% over the past five years, allowing it to easily beat the Morningstar Global Investment Trust category performance of 130%.

The Lindsell Train Investment Trust seeks to maximise long-term total return by investing in global equities and other Lindsell Train funds. But what’s unusual about this investment trust is that it also owns a significant minority stake in its investment manager, Lindsell Train Limited. This 24.3% stake in the investment management company co-founded by Michael Lindsell and Nick Train accounts for 37.9% of the value of its portfolio.

With such a large position in a single unquoted investment, investors in the trust are highly exposed to fluctuations in the valuation of that single company. And although its position in Lindsell Train Limited has no doubt played a big role in the fund’s recent outperformance, the opposite can also happen in the future.

Nevertheless, many investors seem confident that the fund will continue to deliver market-beating returns, as shares in the investment trust currently trade at a 25% premium to its net asset value of £680.03 per share.

Japan

The Baillie Gifford Japan Trust (LSE: BGFD) is a standout performer in the Japanese category, with a five-year return of 248%, compared to the average investment trust peer performance of 176%.

The fund has been managed by Sarah Whitley since 1991 and primarily focuses on medium-to-smaller-sized Japanese companies. Despite sluggish economic growth in that country, Whitley reckons there are still good opportunities for many stocks in her portfolio.

She likes to pick stocks with above average growth prospects and top holdings include Softbank (3.6%), Yaskawa Electric (2.9%), Misumi (2.8%), Start Today (2.8%) and Persol Holding (2.5%).

Sector focus

As technology disruption continues to impact the business landscape, the technology sector has proven to be a consistent market leader in recent years. With this in mind, the Allianz Technology Trust (LSE: ATT) is a solid pick for investors expecting further significant gains.

Over the past five years, the trust has delivered a cumulative performance of 217%, earning it a top-quartile ranking in the technology sector category. Many well-known tech brands dominate its portfolio, including Amazon (6.6%), Apple (6.2%) and Facebook (4.3%) — its top three positions. But the fund also holds big positions in lesser known names, such as cloud computing firm Workday (3.7%) and payments solutions company Square (3.2%).

And as expected, the US is by far its largest geographical exposure, representing just over 80% of total assets. This is followed by China (6.6%), France (3.0%) and South Korea (2.7%).

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Jack Tang has no position in any 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.