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variety of business sectors, you are less exposed if the fortunes of one country or one type of investment go belly up.

If you are ready to dip your toe into the water, but not to jump in headfirst, you could consider investing a small sum every month. That way, you don’t risk putting a large lump sum into the stock market just before a downturn – you’ll be investing through the good times and the bad.

Furthermore, you can always put money into both a cash and a stocks and shares Isa in the same tax year.

However, you cannot put money into more than one of each type of Isa and the total cannot be greater than £20,000.

4 BUILD AN ISA AROUND TRUSTS AND FUNDS

WITH thousands of funds, investment trusts and stocks to choose from, it can be hard to know where to start.

If you need a steer, most stocks and shares Isa providers have a best-buy list of their recommended funds.

There is no guarantee these will perform better than others, but they do offer the reassurance that experts have trawled over them in hours of due diligence.

Here are a few ideas that may suit both those who are just starting out, as well as the more seasoned Isa investor.

Fidelity Index World

WORKING out which sectors and regions are likely to perform well is hard, even when the economy is motoring along smoothly. But in this era of uncertainty, it’s tougher than usual. So rather than picking between them, why not buy the lot?

A global tracker fund allows you to invest in thousands of companies all around the globe. They are also lowcost so you minimise the risk of your returns being eaten up by fees.

Fidelity Index World fund is one. For just 0.12 per cent a year, you get access to a small slice of thousands of companies.

Your returns essentially mirror the average performance of stock markets all across the world.

Beware that with global tracker funds you may have a bigger exposure to tech companies than you realise.

For instance, the top five holdings of Fidelity Index World are Apple, Microsoft, Google’s parent company Alphabet, Amazon and Facebookowner Meta. The fund has generated returns over the past three years of 46 per cent and 11 per cent over the past year.

City of London

PAST performance is never a guarantee of future returns. Nonetheless, there is something reassuring about putting money in an investment company that has been around for more than a century.

Investment trust City of London was launched in 1891 and has raised its annual dividend every year since 1966.

It invests in large UK companies such as British American Tobacco, Diageo and Tesco.

It pays an annual dividend income of about 5 per cent and has an annual charge of 0.38 per cent. The trust has produced returns over the past three years of 12 per cent and 10 per cent over the past year.

Vanguard LifeStrategy 40% Equity

SOME investors want to reduce risk with a fund holding assets other than shares. Vanguard’s LifeStrategy funds offer a mix of bonds and shares under one bonnet.

Bonds are a more defensive asset than equities, providing a regular income and less price volatility. In its five funds, equity exposure ranges from 20 to 100 per cent. You pick the ratio of shares to bonds to suit your appetite for risk. Over the past three years, the fund with 40 per cent exposure to equity has produced a return of 16 per cent.

In the past year, it has trodden water, generating a return of 0.4 per cent. Annual charges are 0.22 per cent.

BlackRock Continental European

THIS fund invests at least 70 per cent of its assets in large companies listed on European stock exchanges.

It is the only fund listed on four of the five best-buy lists of the biggest Isa platforms.

It has an annual charge of 0.93 per cent. Over the past three years, it has delivered a return of 56 per cent, and 3 per cent in the past year.

F&C

LIKE City of London, F&C has been around since time immemorial – 1868. It’s the oldest investment trust listed on the UK stock market.

Its name doesn’t give much away, but it is a global fund with assets valued at £4.2 billion and is managed by BMPO Global Asset Management.

The trust’s attributes include an annual charge of just 0.52 per cent and 48 consecutive years of dividend increases. Although more than half of its assets are in the US it has key holdings in all major markets. Diversification lies at its core.

It will never shoot the lights out when it comes to performance.

However, over the past one and five years, returns are 3 and 47 per cent respectively.

A super foundation stone for any Isa investment portfolio. rachel.rickard@mailonsunday.co.uk