Investment gratitude: what Elite Rated managers are thankful for
Thanksgiving is just around the corner, a holiday that doesn’t always get the best rep (both inside...
Junior ISAs were introduced back in November 2011 as long-term, tax-free savings vehicles for children under the age of 18. The current annual maximum that can be invested into a Junior ISA during a tax year is £9,000*. This tax year runs from 6th April to the following 5th April.
There are no limits as to how this money can be invested. You can contribute an annual lump sum, make regular monthly deposits, or opt for ad hoc payments. However, the total saved/invested must not exceed the £9,000 limit. Therefore, if £3,000 has been paid into a cash Junior ISA, only a maximum of £6,000 can be put into a stocks and shares Junior ISA in the same tax year.
The data shows Junior ISA investors who accessed higher-risk asset classes will have generated impressive returns from themes such as technology and innovative healthcare that typically require longer-term investment horizons.
Of the 232 Elite funds and trusts currently Rated by FundCalibre, 145 have track records that extend to the launch of the Junior ISA in November 2011. All of these funds have produced a positive return in this period with 78% boosting more than 100% returns during the period and a quarter of funds returning move than 250%**.
The top-performing Elite Rated fund since the launch of Junior ISAs is Fidelity Global Technology, which has delivered an astounding growth rate of 808.6%** since November 2011.
In second spot is AXA Framlington Global Technology, another fund that has seen outsized performance, returning 555.27%** over the same period. Its focus on global technology investments underscores the importance of a long-term perspective when participating in the digital revolution.
Also in the top ten performers is AXA Framlington Biotech, which posted stellar returns, with a 466.7%** return on capital invested. Darius McDermott, managing director of FundCalibre, says this emphasises the need for patience when investing in more volatile specialist areas such as biotechnology. “Ground-breaking discoveries and treatments may take years to reach the market, and long-term investors are well-positioned to reap the benefits,” he said.
Meanwhile, the Guinness Global Innovators fund’s growth rate of 453%** over the period underscores the long-term potential of tapping into innovative industries. The managers of this fund have identified nine core innovation themes through their research. These themes range from advanced healthcare to artificial intelligence to big data.
“Innovation is a multi-year investment journey, and patient investors can harness its growth. The data shows that Junior ISAs are not just a practical way for parents to secure their child’s financial future; they are also an ideal vehicle for capturing investment themes that take years to mature. This can be five or ten years or even the full 18-year investing period of the Junior ISA,” Darius added.
|Rank||Fund/Trust||Percentage returns since JISA launch**|
|1||Fidelity Global Technology||808.6%|
|2||AXA Framlington Global Technology||555.3%|
|3||Polar Capital Healthcare Opportunities||473%|
|4||Scottish Mortgage Investment Trust||469.8%|
|5||AXA Framlington Biotech||466.7%|
|7||AXA Framlington American Growth||456.8%|
|8||Guinness Global Innovators||453%|
|9||Baillie Gifford American||426.9%|
|10||Polar Capital Global Insurance||411.2%|
|11||GAM Star Disruptive Growth||403.9%|
|12||Stewart Investors Indian Subcontinent Sustainability||378.2%|
|13||Goldman Sachs India Equity Portfolio||369.6%|
|14||JPM US Equity Income||329.9%|
|15||BlackRock European Dynamic||323%|
|16||FTF Martin Currie US Unconstrained||312.5%|
|17||Rathbone Global Opportunities||311.9%|
|18||IFSL Marlborough European Special Situations||310.7%|
|19||CT Global Extended Alpha||310.2%|
|20||Fidelity Global Special Situations||309.2%|
But it is not just specialist funds that have performed since Junior ISAs were launched. More generalist funds have seen impressive returns, too. The Rathbone Global Opportunities fund is a global growth strategy looking to buy innovative companies that have flown under the radar of the main market. It aims to identify global themes and invest in them early. This fund returned 311.9%** over the timeframe.
Meanwhile, Goldman Sachs India Equity Portfolio, BlackRock European Dynamic, and JPM US Equity Income also appeared in the top twenty performers**, highlighting the importance of geographical allocations and portfolio diversification.
*Source: Gov.uk, October 2023
**Source: FE Analytics, total return in sterling, 1 November 2011 to 22 October 2023
Photo by Ben Wicks on Unsplash