ISA Investment Ideas in 2023
Important information - This is not personal advice, if you're not sure whether an investment is right for you, please contact us for investment advice. Investments and income can fall as well as rise in value so you could get back less than you put in. Tax rules can change and benefits will depend on circumstances.
Choosing your ISA investments
There are a few things to check before investing in an ISA.
You should only consider making an investment if:
- You’re willing and able to accept a level of risk and won’t need the money for at least 5 years. With investing, there’s no guarantee of making money and you could get back less than you invest.
- You’ve saved a supply of cash that you can access easily for emergencies – a good rule of thumb is to have around 6 months of expenditure.
- You want the chance to grow your money more than you could with cash.
You can also read around the subject. We've covered what we think you need to know, from investing rules of thumb, to understanding how to manage behaviours to make the right decisions.
Once you've decided that you want to invest, our latest ideas for an ISA could provide some inspiration.
Latest fund ideas for an ISA
These investment ideas aren’t personal advice. Investing in these funds isn’t right for everyone. Investors should only invest if the fund’s objectives are aligned with their own, and there’s a specific need for the type of investment being made. Investors should understand the specific risks of a fund before they invest, and make sure any new investment forms part of a diversified portfolio.
Investments rise and fall in value, so you could get back less than you invest. If you’re not sure an investment is right for you, seek advice.
Total return fund
Total return funds are more conservative than funds that invest fully in company shares. They normally invest in a mix of investments including shares, bonds, commodities and currencies. They could help provide modest growth for your investment portfolio over the long term, and help shelter your money when stock markets fall, but are unlikely to keep up with stock markets when they rise quickly.
We think the fund could form the foundation of a broad investment portfolio, has the potential to bring some stability to a more adventurous portfolio, or provide some long-term growth potential to a more conservative portfolio.
- Aims to grow investors' money steadily over the long run, while limiting losses when markets fall.
- Invests in a mix of investments including shares, bonds, commodities and currencies and includes some of the world's best-known companies with highly recognisable brands.
- The fund has the flexibility to invest in higher-risk smaller companies and while the fund contains a diverse range of investments, it is concentrated, which is a higher-risk approach.
UK equity income fund
UK equity income funds are a convenient way to invest in a mix of dividend-paying UK companies, and to access one of the highest-yielding stock markets in the world. An equity income fund can be a great addition to an ISA portfolio for different reasons. You can take the pay-outs to supplement your income and have a bit of extra cash in your back pocket. Or if you’re targeting growth and aiming to build your portfolio for longer, reinvesting dividends can help grow your pot thanks to the beneficial effect of compounding.
- The managers focus on companies they believe can pay a sustainable level of income, regardless of the economic backdrop. They mainly invest in large UK businesses, but they also invest in some medium-sized and overseas companies when they find great opportunities.
- We view this as a more conventional UK equity income fund, given the focus on companies with robust cashflows.
- It could help form part of the foundation of an income portfolio, diversify a broader global portfolio, or diversify the income paid by bond funds or a global equity income fund.
- The fund takes its charges from capital, which can increase the yield, but reduces the potential for capital growth.
Responsible investing fund
Responsible investment funds give you the chance to make money in a way that’s in line with your principles. Some avoid investing in areas that do harm, like tobacco producers, weapons manufacturers or alcoholic drinks makers. Others invest in companies that have a positive effect on society – from those that treat their employees well, to those that create clean energy through wind farms or solar panels.
This fund invests in broad developed stock markets while being mindful of environmental, social and governance (ESG) issues. It aims to track the performance of the Solactive L&G ESG Developed Markets Index. It won’t invest in tobacco companies, pure coal producers, makers of controversial weapons or persistent violators of the UN Global Compact Principles.
An index tracker fund is one of the simplest ways to invest, and this one could be a good addition to a broader investment portfolio aiming to deliver long-term growth in a responsible way.
Legal & General Future World ESG Developed Index
- Aims to provide long-term growth whilst being environmental, social and governance focused.
- Invests in broad developed stock markets, such as the US, Japan and Europe.
- Invested in around 1,500 global companies, focused towards sectors such as technology, pharmaceuticals and financials.
- The fund has the flexibility to use derivatives which adds risk if used.
Asia growth fund
Over the years, rapid industrialisation, growing populations, and a desire to succeed have helped transform countries in the Asia region. Domestic consumption is set to be a key driver of growth over the coming years, helped by a young and growing population, and rising wealth. Continued innovation from companies at the forefront of technology based there could also provide exciting growth opportunities for investors. However, younger economies mean the risks are greater and more volatility should be expected. While Asia is home to developed markets such as Hong Kong and Singapore, others, including China and India, are still emerging so a long investment horizon is essential to help ride out the ups and downs.
FSSA Asia Focus
- This fund is run by a manager and team with a great pedigree of investing in Asia.
- We like the culture and philosophy at First State – the managers view themselves as stewards of investors' capital, looking after it as though it's their own.
- Martin Lau has an impressive track record of picking some of the region's best-performing companies over the long run.
- The fund invests in higher risk emerging Asian countries.
Help choosing investments
No matter how you choose to invest, you’ll still need to review your investments and make sure they continue to match your objectives and financial goals.
Our Wealth Shortlist features funds chosen by our analysts for their long-term potential. You can filter the list to find the right ones for you.
Help building a portfolio
Need a hand starting your own investment portfolio? We explain how to build one.
Choose one of our ready-made portfolios. You’ll still need to regularly review the investments but fund managers will take care of the day-to-day investment decisions.
If you’d like a professional to make your investment decisions for you, you can choose a financial adviser to help.
It's all readily available in one place.
MR ALTON, Warwickshire
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