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Home » Features » Investment trust picks for the millennial ISA

As the end of the 2021-22 tax year approaches, time is running out to make the most of your £20,000 annual ISA allowance. Investment companies’ strong long-term performance, income advantages and ability to invest in a wide range of assets make them a compelling option, but with over 300 to choose from where should an investor start?

The Association of Investment Companies (AIC) has spoken to financial advisers and wealth managers to discover which investment companies they would recommend for millennial investors.

Paul Chilver, Associate and Financial Planning Manager at Birkett Long

“I just about scrape into the millennial category, therefore I thought a good starting point would be to look at investment trusts I’m considering and have personally invested in. The first is managed by the boutique Montanaro and is the Montanaro European Smaller Companies Investment Trust which has an excellent long-term track record against its sector.

“The second recommendation has a name many of you will recognise from investing over numerous decades – Mobius – albeit this is a relatively new investment trust, the Mobius Investment Trust. It sits in the Global Emerging Markets sector and is one I personally like, as it’s well diversified over many different emerging market regions.”

Genevra Banszky von Ambroz of Tilney Smith & Williamson

“I think it’s important to consider that millennials, of which I am still just about one, are not as easily defined as a cohort as they used to be, given that their risk profiles and the needs from their portfolios will have evolved as they have grown older. Many will have mortgages and dependents now, and this may result in a higher degree of risk aversion relative to those who are just entering the workforce, relatively unencumbered in terms of their financial responsibilities.

“For those who do have the risk tolerance and the timeframe, I think Ashoka India Equity and VH Global Sustainable Energy Opportunities are really interesting; the former is a mid and small cap Indian equity trust, and the latter, which was launched this time last year, focuses on delivering a diversified portfolio of sustainable energy infrastructure investments which support the UN Sustainable Development Goals and the energy transition. The contrarian in me also thinks that Edinburgh Worldwide, which has had a horrible time of it recently, could be interesting on a long-term view.”

Neil Mumford, Chartered Financial Planner at Milestone Wealth Management

“For a millennial, taking a long-term view with their savings means they can put up with volatility and if investing on a regular basis, this volatility will enable them to benefit from pound cost averaging, which should hopefully provide them with well above average returns. The key is to choose a manager with an excellent track record. Spencer Adair, who manages Monks Investment Trust, fits this perfectly. The trust aims for long-term capital growth which takes priority over income by applying a patient approach to investment, principally from an actively managed global equity portfolio containing a diversified range of growth stocks. The current savage market rotation from quality growth to value has seen this trust sink to a one-year negative return of -25% and a very rare discount, currently 9%. This has not affected its longer-term, ten-year performance of over 210%.”

Philippa Maffioli, Senior Adviser at Blyth-Richmond Investment Managers

“I like young people to have significant exposure to pure growth stocks, and I often recommend that they invest on a monthly basis in order to benefit from pound cost averaging. Inclusion of biotechnology within a strategy is important due to the innovation and technological development within the sector. I therefore recommend the Biotech Growth Trust. 2021 was a challenging year but with strong product launches and more timely drug approvals, it looks appealing to long-term growth investors.

“I am keen for younger people to gain exposure to medium and smaller companies due to the opportunity for growth. Guy Anderson and Anthony Lynch, the investment managers of the Mercantile Investment Trust, look for well-established UK businesses outside the FTSE 100, which enjoy a strong market position and have plenty of room for growth. I like their disciplined approach to research and their stock picking style. In addition, this investment trust has an attractive yield of 3.35% which should be used for reinvestment.”


This article is not investment advice. Investors should do their own research or consult a professional advisor.

Graeme Andrew

Graeme Coles-Andrew

Graeme is Head of Technology at the Armchair Trader. He has worked in online financial investment publishing since 2000 as a website developer, advertising operations manager, data scientist and all-round go-to guy for online technical solutions.

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