Gold is on the verge of breaking through a record high while many of the most popular ISA funds slide in the face of economic turbulence.
As the value of gold approaches an all-time record high, new analysis by TallyMoney reveals the gulf between the precious metal and some of the most popular funds favoured by ISA investors.
At £1,573.07 per ounce, gold hit its second-highest level ever at the weekend, after soaring 17 per cent in 2022.
By contrast, many of the best-known stock market tracker funds are sagging, leaving many ISA investors nursing heavy losses in 2022.
The popular Baillie Gifford American plunged 44.7 per cent against the pound this year amid a meltdown in US tech stocks. The crash ultimately put it more than 61 per cent behind the growth enjoyed by gold investors.
Other tech-heavy funds suffered a similar fate as investors took fright. Legal and General’s Global Technology Index Trust and Vanguard’s S&P 500 ETF fell 42 and 35 per cent respectively against gold.
Fundsmith Equity – Interactive Investor’s most popular fund – was down 26 per cent against gold, while Vanguard’s flagship Lifestyle Strategy 80 fund tumbled 23 per cent.
The dismal showing came as stock markets endured their worst year since the global financial crisis of 2008.
AJ Bell’s Adventurous fund was the only top-pick ISA fund to be in the black over the 12 months, delivering annual growth of just 2.4 per cent. These modest gains are nearly 15 per cent less than someone investing in gold would have enjoyed over the same period.
Time to think differently about gold
Reflecting on the figures, TallyMoney’s CEO, Cameron Parry, explains how gold has managed to remain resilient against ongoing stock market volatility.
“Gold has been a safe haven investment for millennia, and it more than lived up to its reputation in 2022 as stock markets were rocked by abrupt interest rate rises, the energy crisis and war in Ukraine; and while the value of conventional money was eroded by surging inflation.
“If you invested in either a cash or stocks and shares ISA in 2022, the chances are your nest egg lost value in real terms. But with gold prices approaching a record high, those who invested in the most reliable asset of all – real gold – will be in a great position.
“So as the spring ‘ISA season’ approaches, it’s worth thinking differently. While you can’t hold real gold in an ISA, TallyMoney makes saving in gold as easy as opening a bank account. And while its sterling value can vary day by day, over time gold has proven itself to be a reliable and trusted alternative to volatile stock markets and cash savings accounts.
“Over the past 20 years gold prices have soared by 627 per cent against sterling, while the FTSE100 has gained just 110 per cent.”