3 exceptional investment trusts that could boost the returns of a Stocks and Shares ISA
One of the best features of Stocks and Shares ISAs is that they offer access to high-growth investments. Itâs therefore possible to generate very attractive long-term returns.
Here, Iâm going to highlight three investment trusts that have delivered incredible returns for investors over the long run and can be held inside ISA accounts. I believe all three are worth considering today as part of a diversified portfolio.
Run by a top stock picker
First up, we have Pershing Square Holdings (LSE: PSH). This is run by billionaire Bill Ackman, who is widely regarded as one of the worldâs top stock pickers.
Ackman takes a value/quality approach to investing. Stocks in the fund at the moment include the likes of Amazon (which is trading at a historically low valuation), Uber (which is seeing huge free cash flow growth) and Alphabet (one of the cheapest Magnificent 7 stocks).
This approach works for him. Over the last five years, the trustâs share price has risen about 110% versus 50% for the FTSE 100.
There are no guarantees that this trust will continue to outperform, of course. Ackman runs a very concentrated portfolio and therefore if a few of his stocks underperform, overall returns could be disappointing.
His long-term track record is pretty good though. So, this trust could be worth a closer look.
Aiming to maximise returns
Next, we have Scottish Mortgage (LSE: SMT). This is a growth-focused product run by Scottish investment management firm Baillie Gifford.
This trustâs aim is to maximise total returns over the long term. Its strategy here is to invest in exceptional public and private growth companies.
It also has a strong focus on growth themes. Some examples of themes it’s currently focused on include enablers of AI, healthcare innovation, evolution of transport, and the digitalisation of finance.
This growth focus can lead to poor returns at times. For example, in 2022 (when interest rates rose and growth stocks tanked) the trust performed very badly (meaning five-year returns look weak).
Taking a long-term view, however, performance has been excellent. Over the last 10 years, for instance, the share price is up about 275%, more than twice the return of the Footsie.
A trust for the tech boom
Finally, we have the Allianz Technology Trust (LSE: ATT). This is a tech-focused product that’s managed by the AllianzGI Global Technology team, which is based near Silicon Valley where many of the worldâs top tech companies are located.
In my view, this trust is an ideal way to gain exposure to the tech boom we’re currently experiencing. With stocks like Nvidia, Broadcom, and Alphabet in the portfolio, it offers access to industries such as chips, cloud computing, and generative AI.
Investors should note, however, that the sole focus on technology increases risk. Unlike the other two products Iâve mentioned, thereâs very little sector diversification here.
Over the long term, performance here has been good. For example, over the five-year period to the end of October, the share price rose 117%.
There are no guarantees that performance will continue to be strong, of course. If the tech sector continues to shine, however, this trust should provide attractive returns.
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Edward Sheldon has positions in Amazon, Uber, Alphabet, Scottish Mortgage, and Nvidia. The Motley Fool UK has recommended Alphabet, Amazon, Nvidia, and Uber Technologies. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
