If there’s one group of investors I enjoy reading about, it’s the UK’s ISA millionaires. Building a seven-figure ISA account requires both savings discipline and investment skills, and I think we can all learn a lot from these investors.
Recently, I was researching among the most popular mutual funds Hargreaves Lansdowneof ISA millionaires. Here’s a look at three products many of them own today.
Let’s start with Fundsmith EquityGlobal Equity Fund managed by Terry Smith.
Now it comes as no surprise that this investment fund is popular with Hargreaves’ ISA millionaires. It has been the most popular fund in the UK for years.
Much of this has to do with the fund’s excellent performance track record. Since its launch in late 2010, it has delivered returns of over 15% per annum.
This outstanding performance has probably helped many ISA millionaires get to where they are today. An investment of £50,000 in the establishment is now worth over £300,000.
Fundsmith’s secret to success? Smith only invests in high quality businesses that can sustain a high return on capital.
This approach does not work in all market conditions. However, it has worked very well in the long run.
1 Year Return: 5%
5 year return: 79%
Lindsell Train UK Equity
Returning to UK funds, popular among millionaires Lindsell Train UK Equity. It is managed by portfolio manager Nick Train.
This is another fund with a great long-term track record. Since its inception in July 2006, it has returned about 10% per year. That’s an excellent result for a UK-focused fund. To put that figure into perspective, the FTSE All-Share TR The index has returned about 6% a year during this period.
The outperformance here can be attributed to the fact that the fund is concentrated and ignores many sectors of the UK stock market. There are no oil companies or banks in this fund. Instead, it finds high-quality ‘compounders’ Unilever, Diageoand sageWhich has continuously generated wealth for investors.
Of course, the lack of oil companies and banks can sometimes hurt performance. Last year, for example, the fund underperformed the FTSE All-Share index.
However, the strategy has worked well in the long run.
1 Year Return: 9%
5 year return: 37%
Another UK fund is popular Artemis income. It is an equity income product, meaning it aims to provide both capital growth and income. It is managed by Adrian Frost, Nick Shenton, and Andy Marsh, who between them have vast experience in managing funds.
This fund is slightly more diversified in nature than Lindsell Train UK Equity. Not only does it hold many stocks, but it also has exposure to sectors of the market that the train ignores, such as oil (which was its top holding at the end of February. BP) and insurance.
However, it still has a strong long-term track record. Since its launch in June 2000, it has returned around 570% versus around 200% for the FTSE All-Share TR index.
An attractive feature of this fund is its yield. Currently, it is slightly more than 4%.
On the downside, the focus on income here can reduce the potential for capital growth.
1 Year Return: 3%
5 year return: 27%
The post Hargreaves Lansdown’s ISA millionaires love these 3 investment funds appeared first on The Motley Fool UK.
Edward Sheldon holds positions at Diageo plc, Hargreaves Lansdowne plc, Sage Group plc, and Unilever plc. The Motley Fool UK recommends Diageo Plc, Hargreaves Lansdown Plc, Sage Group Plc, and Unilever Plc. The views expressed on the companies mentioned in this article are those of the author and therefore may differ from the official recommendations we make on our membership services such as Share Advisor, Hidden Winner and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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