Chart of the Week – In The Year 2525

So, let’s highlight the advantages of long-term investing compared to holding cash.

For example:

• If an investor had maximised their ISA allowance every year since 1999, they would have contributed £306,650 into their account.
• If that money had been invested in a Global Stock Portfolio, that £306,650 would have grown to £723,357.
• If the same amount had been invested into just cash, it would now be worth £355,592.
• Sadly, from 2021 to 2022, £1.5 billion was subscribed to Junior ISAs, around 42% of which was in cash.
• If you expect inflation to be higher in the future, then this only increases the argument for investing.

I often get asked about investments, particularly around this time of year, as people consider what to allocate to in their ISA.

The chart above shows the return you would have achieved if you had invested £20,000 (and nothing else going forward) in the Marlborough UK Special Situations Fund when it launched in 1995 and let it grow.

The following springs to mind:

• Investing in cash in a tax-free vehicle like an ISA doesn’t make sense. It would be best to try to maximise your returns, as no tax applies to capital gains, no matter how big.
• As for what to buy, the FundCalibre research team has looked at the success of the ISA-eligible funds that have delivered the best returns over the past 25 years.
  The top-performing retail investment fund was the UK-focused IFSL Marlborough Special Situations. Launched in July 1995, it has delivered a 2,643% return over the past 25 years.
  An investor who had put their £7,000 ISA allowance into this fund in 1999 would now have a pot of £192,026. In comparison, someone who saved the £7,000 in a cash ISA would have about £14,656 now.
• ISA’s are a bit of a political hot potato, so you should be looking to take full advantage of these tax-free vehicles before somebody decides to change the rules.

My goal is to ensure we have a world-class multi-asset offering for our clients, and that’s because I follow in the footsteps of greatness. Our single-strategy funds are unrivalled over the long term.

Takeaway: Speaking to a financial advisor will help you to implement a financial plan that is right for you.

Did you know: The capability of new artificial intelligence models will surpass human intelligence by the end of next year. Click here.

Marlborough Podcast: This week, we discuss the US jobs report, economic divergence & rate-cut expectations. Click here.