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18 years of ISAs: What was the best investment company sector?

9 March 2017

New data from the AIC on the top performing investment company sectors over the past 18 years.

  • Sector Specialist: Biotechnology & Healthcare top sector, up 1,313%
  • Emerging Markets and Asia Pacific performing strongly over 18 years & smaller companies also feature 

We’ve all had those moments when we’ve wished we could turn back time, and Cher famously sang a song about it. With ISAs now nearly 18 years old, the Association of Investment Companies (AIC) has published a list of the top performing investment company sectors over this period.  

The top performing investment company sector over the last 18 years is Sector Specialist: Biotechnology & Healthcare, up a whopping 1,313% - clearly not a bad place to be over the long-term, to date at least.  The Asia Pacific sectors and Global Emerging Markets also feature strongly, as do smaller companies across a range of regions.

Annabel Brodie-Smith, Communications Director, Association of Investment Companies (AIC) said: “Everyone has different ideas about what constitutes ‘long-term’ – in fact our own investor confidence research this year found that 8% of active investors consider 3 to 5 years a ‘long-term’ investment horizon. Whereas we consider long-term investments to be at least five years and preferably longer. 

“There’s no doubt that 18 years is a long-term investment and it was Warren Buffet who said that ‘successful investing takes time, discipline and patience.’  It’s clear that investors in some of the top performing investment company sectors have been rewarded for their patience over the long-term. In some sectors investors have needed bags of patience, as demonstrated by the volatility of the Global Emerging Markets sector in recent years, but their investment has paid off over the long term. Of course, there’s no telling which sector will be topping the tables in the future so investors need to focus on a diversified portfolio for the long-term.”

Asia Pacific and Global Emerging Markets also lead the pack

Hot on the heels of the Sector Specialist: Biotechnology & Healthcare is the eight companies strong Country Specialist: Asia Pacific sector, in second place over 18 years and up 1,280%.  This is followed by the Global Emerging Markets sector, which is up 805%, but as the discrete performance data shows, this sector has had a more volatile time over the last 5 years.  Also in the top 5 over the period is the Asia Pacific Excluding Japan sector, up 794%. This data demonstrates that despite some greater volatility over the last five years compared to the sector average, long-term patient investors have been rewarded.

Smaller companies have also produced some strong returns and feature heavily amongst the top performing investment company sectors, with European Smaller Companies in 5th place, up 625%, followed by North American Smaller Companies (556%) and UK Smaller Companies (520%).  The Private Equity sector has also posted above average returns, up 507%, and the UK All Companies sector up 456%.

Top performing investment company sectors over 18 years (% share price total return)

 

28/02/1999 - 28/02/2017

29/02/2012 - 28/02/2013

 28/02/2013 - 28/02/2014

 28/02/2014 - 28/02/2015

 28/02/2015 - 29/02/2016

 29/02/2016 - 28/02/217

Duration (years)

18

1

1

1

1

1

Overall weighted average investment company

388.91

16.07

10.62

9.77

-4.18

26.97

Sector Specialist: Biotechnology & Healthcare

1,313.05

31.15

46.87

34.14

-10.17

33.44

Country Specialists: Asia Pacific

1,279.81

15.11

-0.47

37.06

-10.19

49.15

Global Emerging Markets

804.97

10.55

-17.45

11.55

-18.56

45.04

Asia Pacific - Excluding Japan

794.03

22.16

-13.52

20.67

-12.97

40.82

European Smaller Companies

625.36

24.68

37.18

-0.61

11.78

24.43

North American Smaller Companies

555.55

30.31

14.05

12.35

5.87

28.74

UK Smaller Companies

520.15

28.99

47.10

-7.67

3.64

20.58

Private Equity

506.71

30.03

9.41

10.55

-2.38

43.68

UK All Companies

456.07

25.43

32.56

-3.01

0.53

17.42

-Ends-

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Notes

  1. Performance data is to 28 February 2017 based on the last official close prices at the month end, on a % share price total return basis excluding VCTs. No expenses taken into account. Source: AIC using Morningstar.
  2. The 2017 AIC investor confidence research was conducted by Opinium Research between 25 January to 1 February amongst 1,004 investors in the stock market.
  3. The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment.  Today, the AIC represents a broad range of closed ended investment companies, incorporating investment trusts and other closed ended investment companies and VCTs.  The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help Members add value for shareholders over the longer term. The AIC has 344 members and the industry has total assets of approximately £159 billion.
  4. Disclaimer: The information contained in this press release does not constitute investment advice or personal recommendation and it is not an invitation or inducement to engage in investment activity. You should seek independent financial and, if appropriate, legal advice as to the suitability of any investment decision. Past performance is not a guide to future performance.  The value of investment company shares, and the income from them, can fall as well as rise.  You may not get back the full amount invested and, in some cases, nothing at all.

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Media enquiries

Annabel Brodie-Smith
Communications Director
Tel: 020 7282 5580
annabel.brodie-smith@theaic.co.uk
@annabelbrodies
@aicpress

Laura Thomas
PR & Marketing Executive
Tel: 020 7282 5551
laura.thomas@theaic.co.uk
@aicpress

Elmley de la Cour
PR & Marketing Executive
Tel: 020 7282 5583
elmley.delacour@theaic.co.uk
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