Best and worst Isa funds since 1999

Marina Gerner
7 March 2017
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With less than a month ago until the end of 'Isa season' it is the time of year when investors are searching for last minute ideas and inspiration.

A useful starting point, according FundExpert, is to look at funds that have earned their stripes since Isas were introduced on 6 April, 1999, replacing personal equity plans (Peps).

At the time the Isa allowance stood at £7,000, but this has become more generous over the years. This tax year up to £15,240 can be sheltered in Isas, rising to £20,000 in the 2017-18 tax year.

FundExpert analysed the best and worst funds since Isas were introduced. The analyst assumed the full Isa allowance was invested - which adds up to £166,360 - every year since April 1999, and that investors stuck with the same fund year after year.

 

Best and worst Isa fund picks

They found the best fund was Marlborough Special Situations, growing to £707,655, which amounts to a profit of £541,295 on the amount invested.

The worst fund was Threadneedle Japan, which would have made you £65,600 in comparison, if you had stuck with it since 1999.

In comparison, FundExpert found that if you had opted for the tracker fund HSBC FTSE 100 Index you would have made £96,747 in profit.

Of the top 10 of the best Isa funds just under half are smaller company funds and Asia-Pacific or emerging markets funds.

One gold fund appears on the list - BlackRock Gold & General returned a profit of £197,103 over the time period.

For the worst funds, shown in the second table, the average return is £81,418. Interestingly, a number of funds at the bottom are Japan funds, global and diversified funds.

Brian Dennehy, managing director of FundExpert, says: "Any sector can have a good or bad run. But diversified funds are supposed to protect investors from those prolonged down periods - that is the point, theoretically, of diversification plus active management.

"There is over £1.6 billion languishing in such diversified or global funds, which includes over £1 billion in Scottish Widows funds alone. This has to be a huge incentive for investors to pay much closer attention to their fund selection process."

 

Table 1: Best Isa funds (total return 6/4/99-24/2/17)

FundSize (m)Value today (£)Profit in excess of total ISA contributions (£)
Marlborough - Special Situations1,170.50707,655541,295
Artemis - UK Smaller Companies384.2470,926304,566
Stewart Investors - Asia Pacific857.9601,767435,407
BlackRock - UK Smaller Companies405.3529,564363,204
Aberdeen - Emerging Markets Equity1,631.20502,371336,011
Stewart Investors - Global Emerging Markets669.2495,608329,248
Schroder - US Smaller Companies837.1508,904342,544
Baillie Gifford - Emerging Markets Growth573.5441,358274,998
Henderson - China Opportunities500.4503,350336,990
BlackRock - Gold & General1,333.70363,463197,103

 

Table 2: Worst Isa funds (total return 6/4/99-24/2/17)

FundSize (m)Value today (£)Profit in excess of total Isa contributions (£)
Threadneedle - Japan434.8231,96065,600
Investec - Global Dynamic581.3271,304104,944
Scottish Widows - Ethical98.1211,84345,483
Scottish Widows - Japan Growth211.5257,96991,609
Henderson - Multi-Manager Diversified75.0236,83070,470
AXA - Rosenberg Japan70.6264,94898,588
Standard Life Investment - Japanese Equity Growth271.4279,068112,708
Premier - Optimum Income80.6254,77988,419
F&C - High Income83.1189,22022,860
Scottish Widows - Global Growth936.5279,859113,499

 

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