Where the experts invest
MANY investors, from novices to professionals, will be looking to add to their Isas in the coming weeks – this tax year and next. Some will be assessing whether their existing investment Isas are set up to maximise returns. We asked some of the country’s leading financial experts about the changes they plan to make.
HOLLY MACKAY Founder of website Boring Money
DOING as the experts do can be a sound investment strategy, but even those who make a living from scrutinising financial markets can sometimes find themselves stumped. Step forward Holly Mackay.
‘I genuinely think this year is harder to call than ever in terms of what to do on the Isa front,’ she says.
‘Stock markets are high and technology stocks are pumped. Is this the new normal? Or a bubble?
‘And we have seen how hard it is to call the future.’
Mackay is erring on the side of caution. She says: ‘I took some profits recently from Isa investments that had gone nuts. As a result, I now have a cash buffer in case things hit the skids, so I can buy when shares are cheap. For long-term savers, any stock market corrections are like the January sales.’
She adds: ‘I have gradually been swapping some of my Isa investment funds for sustainable alternatives.
‘I hold the iShares Global Clean Energy exchange-traded fund, which has been excessively hyped over the past four to six months, but I’m hanging on to it.
‘The Liontrust Sustainable Future Global Growth fund has served me well, as has Baillie Gifford Positive Change.’ She is also making sure her Isa is globally diversified.
She adds: ‘If anyone thinks my Isa strategy sounds sensible but doesn’t know where to start, I would look at a robo-adviser or check out the ready-made Vanguard LifeStrategy fund range or the BMO Sustainable MAP (Multi Asset Portfolio) range.
‘I have about 50 per cent of my Isa with Vanguard – my sensible side – and then I tinker and play with the remaining 50 per cent, looking particularly at emerging markets, sustainable funds and Asia for opportunities.’
MOIRA O’NEILL Head of personal finance at wealth manager Interactive Investor
MONEY expert Moira O’Neill cashed in some of her Isa investments to pay for building work on her home last year. Her priority now is to rebuild her financial fortress by contributing to a cash Isa and also buying Premium Bonds, where the prize rate is equivalent to 1 per cent interest a year. As a result, she is prepared to temporarily neglect her stocks and shares Isa.
She says: ‘Currently, my only Isa investment is City of London Investment Trust, but I’d like to add more trusts later in the year as I want to have the opportunity to scale back on work from the age of 55.
‘Now that the Government has announced plans to move the age at which private pensions can be accessed from 55 to 57 for people of my age – 45 – I need to plug that two year gap.’
BEN YEARSLEY Investment director at Shore Financial Planning
RATHER than waiting to invest his Isa allowance until later in the new tax year, Ben Yearsley will invest on April 6 – just as he did last year. ‘Markets felt so cheap in the midst of the pandemic I had to do it then,’ he says. ‘I invested in a mix of funds, trusts and shares, such as the Downing Strategic Micro-Cap investment trust, the Schroder Global Recovery and JPMorgan Russian Securities funds, plus a few shares including Centrica, Barclays, ITV, Aviva and PureTech Health.
‘Investing in April last year was all about taking advantage of bombedout prices, whereas this year it will be more long-term in nature.’ Yearsley is now looking at the UK and Asia. He says: ‘The UK stock market looks cheap and with the vaccine programme going so well I think it is in an excellent position to move ahead strongly.’ He likes the Montanaro UK Smaller Companies investment trust and the Man GLG Undervalued Assets fund. He adds: ‘Large parts of Asia have had a good crisis – if it is possible to say such a thing. Their economies need lower levels of fiscal stimulus and from a health perspective many countries handled it better than developed markets.’ Asian funds that he likes include FSSA Asia Focus, managed by First Sentier Investor, and Matthews China Smaller Companies.
DARIUS MCDERMOTT AND JULIET SCHOOLING LATTER Managing director and research director at Chelsea Financial Services
LIKE Ben Yearsley, Darius McDermott is a fan of UK and Asian stock markets. He explains: ‘I like the UK market because it has been unloved for so long.
‘In terms of the vaccine roll-out, we are ahead of many other countries and the worst of the Brexit headwind is behind us.’
On Asia, he says: ‘I have a preference for Asia due to its good handling of the pandemic and being naturally linked to global economic growth. This includes Japan, which is a continually improving economic story.
‘So come April 6, I will be putting some money into the Axa Framlington UK Mid Cap, FSSA Japan Focus and Stewart Investors Asia Pacific Leaders Sustainability funds.’
His colleague Juliet Schooling Latter will be investing in the Ninety One Global Environment fund for her three daughters’ Junior Isas.
She says: ‘If I’m investing in my children’s future, I need to invest in a better future.’