Baillie Gifford funds dominate as Junior ISA turns seven

Junior ISAs, the tax-efficient savings wrapper for children, turns seven on 1 November 2018.

According to the latest statistics from HMRC, more than £4.3 billion* has been saved or invested in Junior ISAs, on behalf of 3.74 million* children, since their launch seven years ago.

While cash savings have proved the most popular choice (despite persistently low interest rates), the amounts invested in stocks and shares Junior ISAs is now substantially more: the average amount subscribed to a cash Junior ISA in the last tax year (2017-2018) was £813*, while the equivalent investment Junior ISA received £1,421*.

Which Elite Rated funds would have rewarded our children?

Looking at our Elite Rated funds over the lifetime of the Junior ISA, Japanese equities proved to be the most successful place to be; and Baillie Gifford the fund management company to whom you may have wanted to entrust your money as four of the top five performing funds are run by its managers.

The best performing Elite Rated fund was Baillie Gifford Shin Nippon, an investment trust that focuses on smaller companies. Its sister trust, Baillie Gifford Japan, which invests in medium-sized companies as well as smaller ones, was in third place, while two global equity products from the company – Scottish Mortgage Investment Trust and Baillie Gifford Global Discovery – were in fourth and fifth place respectively. Only Polar Capital Healthcare Opportunities in second place broke up the Baillie Gifford party.

What the Baillie Gifford-run funds, and some others in the top ten, have in common is their ‘growth’ strategies, which have very much been in favour in recent years as people have sought out faster-growing investments in a low-growth environment.

Top ten Elite Rated funds over seven years**:

PositionElite Rated fundsPercentage returns**
1Baillie Gifford Shin Nippon439.37%
2Polar Capital Healthcare Opportunities331.64%
3Baillie Gifford Japan Trust305.43%
4Scottish Mortgage Investment Trust297.40%
5Baillie Gifford Global Discovery253.26%
6Fundsmith Equity249.69%
7Jupiter European Opportunities 240.67%
8Liontrust UK Smaller Companies232.71%
9LF Livingbridge UK Micro Cap232.31%
10AXA Framlington Global Technology223.65%

*Individual savings account statistics, August 2018, subscriptions as reported to HMRC by providers for financial years ending 5th April.

**Source: FE Analytics, total returns in sterling, 1 November 2011 to 29 October 2018

 

The views of the author and any people interviewed are their own and do not constitute financial advice. However the knowledge that professional analysts have analysed a fund or trust in depth before assigning them a rating can be a valuable additional filter for anyone looking to make their own decisions. Before you make any investment decision make sure you’re comfortable and fully understand the risks. If you invest in fund or trust make sure you know what specific risks they’re exposed to. Past performance is not a reliable guide to future returns. Remember all investments can fall in value as well as rise, so you could make a loss.