Best-performing funds and sectors since ISA launch in April 1999

Just a few weeks shy of its 27th birthday, the ISA can teach us a few things about investing. 

The sheer number of ISA millionaires alone reminds us of what can be done when you have the time (and money) to invest for the long term, while analysis points to those who have achieved such status making good use of riskier assets such as equities and investment trusts. 

For those who are able to plough their cash into an ISA for the long term, the tricky question is then how to invest it.  

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While we lack a crystal ball, returns data going back to the launch of the ISA in April 1999 does show which funds and investment trusts have done the best over that 27-year stretch and provides some insight about investing for the long run. 

The coming decades will undoubtedly be different but the data suggests that specialist areas perceived as carrying more risk have tended to deliver the goods over this period. 

From Asia to biotech 

It often feels difficult to stick with a market or sector going through a challenging period, as strongly as we might believe in an eventual recovery.  

UK equities looked almost doomed just a few years ago but have recovered strongly since while China, having flirted with “uninvestable” status in 2021, has rebounded fiercely in the last year. 

Meanwhile, those investors continuing to back battered renewable energy infrastructure trusts have much to dent their conviction.

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Such trepidation can be even greater when an area is especially niche or especially volatile. But data from 6 April 1999 to 10 March 2026 shows that some racy investments have made massive returns over that long period. 

Source: FE Analytics, covering 06/04/1999-10/03/2026. Past performance is not a guide to future performance.

Of those vehicles with such a long track record, the average trust in the Association of Investment Companies (AIC)’ Asia Pacific Smaller Companies sector made a share price total return of more than 5,000% over this 27-year stretch. Although do bear in mind that it is a small sector, with just three constituents.   

Sectors focused on biotechnology and healthcare, technology and the India region meanwhile generated an average return of more than 2,000%. As the table shows, European smaller companies and commodity funds also performed extremely strongly, as did all manner of generalist Asia funds. 

What’s striking is that US equities, one of the most obvious investment successes of the last decade, are very far from the top of the table. The average trust in the AIC North America sector returned 674% over this period, with its open-ended equivalent on 538.2%. 

Beneath the surface 

A few caveats need listing about this data. Struggling funds and trusts often tend to close, get bought out or merged away in the end. 

As such, any lengthy investment time frame like the one we have used tends to only capture returns from those names that have endured and succeeded, introducing a strong degree of survivor bias.  

Only the performance of the strongest funds comes through, and any funds that fell by the wayside in volatile moments for sectors such as biotechnology are not counted here.  

Given the sheer ups and downs involved in such areas, plenty of investors will have lost money, seen their fund of choice fail or disappear, or have not held on long enough to enjoy these massive gains. 

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A 27-year period also inevitably fails to capture the returns of younger funds that have wowed us in recent years.  

WS Ruffer Gold C Acc is currently one of the top-performing funds available to UK investors over a 10-year period but it is not old enough to fall into this analysis.

But, putting such warnings aside, these figures do show that riskier, specialist exposures can reward investors. 

Which funds performed the best? 

With a tendency to experience bigger moves than open-ended funds (both up and down) thanks in part to their use of gearing, investment trusts dominate the list of top performers during this period. 

Unsurprisingly many come from the sectors listed above: Asian equity vehicles Aberdeen Asia Focus PLC (LSE:AAS), Scottish Oriental Smaller Cos Ord (LSE:SST) and Pacific Horizon Ord (LSE:PHI) dominate the list, while tech behemoths Allianz Technology Trust Ord (LSE:ATT) and Polar Capital Technology Ord (LSE:PCT) also sit in the table.  

On a tech-related note, we also see a strong showing from HgCapital Trust Ord (LSE:HGT), the private equity software-as-a-service fund which sold off heavily on artificial intelligence-related fears earlier this year. 

Biotech and healthcare plays also make an appearance, as does investor favourite Scottish Mortgage Ord (LSE:SMT).

Past performance is not a guide to future performance.

Smaller companies have lagged their larger peers in recent years, but this 27-year stretch does showcase their ability to outperform over the longer term. 

We see that in Asia with Aberdeen Asia Focus PLC (LSE:AAS) and Scottish Oriental Smaller Cos Ord (LSE:SST) and on the Continent with JPMorgan European Discovery Ord (LSE:JEDT). 

But the merits of small and mid-cap shares are also evident via the appearance of UK names IFSL Marlborough Special Sits A Acc, Fidelity Special Values Ord (LSE:FSV) and Artemis UK Smaller Companies I Acc.

Fidelity Special Values, best known for its value style under Alex Wright, has tended to have a decent allocation to mid-caps in recent years, with FTSE 250 shares making up more than a third of the portfolio as of late. 

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Marlborough Special Situations has a good level of exposure to small and micro-cap shares, something that appears to have paid off in the long run even if it has contributed to weak recent performance. 

The fund is down by 11% over a five-year stretch, with its performance having peaked in late 2021. Interest rate rises will have done no favours to this growth-minded portfolio in recent history. 

In December, we made the case for holding the fund alongside the more large cap-focused Artemis UK Select I Acc as a way of getting diversified exposure to UK-listed shares.