THE MOST POPULAR STOCKS & SHARES ISAS
ECIDING HOW to invest your Stocks and Shares Isa allowance is not easy, as you are now faced with a world of choice. You can choose from thousands of stocks and funds, with you can buy cheaply and easily without advice through online platforms such as AJ Bell, Cavendish Online, Fidelity FundsNetwork, FundCalibre, Hargreaves Lansdown, Tilney and The Share Centre.
Platforms cut initial fund charges to zero in many cases, which means more of your money goes straight to work, while some also offer rebates on annual fund management fees. But which funds should you buy? The Vanguard LifeStrategy range of ETFs, which investing a portfolio of shares and bonds adjusted to match your investment goals and attitude to risk, are highly popular. Vanguard LifeStrategy 60%, which is 60 per cent invested in equities and 40 per cent in bonds, is now the second best selling fund in the UK, AJ Bell says. Vanguard LifeStrategy 80%, which is 80% invested in equities, is in third place. Another ETF, the Japan Equity Index Fund from iShares, is also highly popular after growing 75 per cent over five years.
However, the most popular investment fund in the UK is FundSmith Equity, run by top fund manager Terry Smith, whose recent performance has been startling. His fund has returned 138 per cent over five years from a portfolio of global stocks, helped by heavy exposure to the booming US market. Jupiter European is also hugely popular having benefited from improved economic performance in Europe, and is up 89 per cent over five years.
Schroder US Mid Cap is popular after rising 106 per cent over five years, while CF Woodford Equity Income from renowned fund manager Neil Woodford remains popular even though his performance has slipped recently, Hughes said. “Investors are keeping faith with Neil Woodford despite a very challenging period.”
Stewart Investors Asia-Pacific Leaders is highly popular among those wanting exposure to the booming Asia region and emerging markets. It is up 50 per cent in five years, alternatively you might consider Vanguard FTSE Emerging Markets Shares ETF, up 36 per cent in just three years. Darius McDermott, managing director of FundCalibre.co.uk, said you should not just follow the crowd and should make sure you have a balanced portfolio that covers different countries, regions and sectors. Once you built a core base of investments covering in the UK, US, Europe and emerging markets, you could inject a little excitement with a fund such as Aberdeen Latin American Equity, which invests in Brazil, Mexico and Chile. “The growth potential of emerging markets over the long term is very exciting,” McDermott says, “but investing in them can be a bumpy ride, so investors need to be sure they are able to stomach the extra risk.” Polar Capital Global Insurance is a more defensive fund targeting the solid insurance industry, while low-risk investors looking for income might also be tempted by M&G Emerging Markets Bond, which currently yields a generous 5.33 per cent.