Our top 10 ISA funds | January 19 2012
Make the most of your ISA allowance with our top ISA funds
With higher taxes and reducing tax-reliefs on pensions, the ISA allowance is a compelling benefit. ISAs are free from income and capital gains tax, which makes them an excellent option for medium to long-term saving, additional retirement savings and people seeking an income.
You can invest up to £10,680 in an ISA (rising to £11,280 in 2012/13). Up to half can be invested in a cash ISA with the remainder, or the full amount, invested in a stocks and shares ISA. And with the end of the tax-year approaching, it is important to ensure that you maximize your ISA allowance in plenty of time.
With a background in investment research and management, we use our expertise, experience and contact with investment companies to select funds which we believe offer superior prospects.
As financial planners, our investment recommendations are based on a thorough understanding of our clients’ personal needs and objectives. However, a selection of our best fund options are highlighted below.
When you are considering making a lump sum investment or saving regularly it is important to ensure the fund meets your attitude to risk and your objectives. If you would like to discuss your investment options, please contact us.
Investing for growth?
Fidelity Strategic Bond Fund provides managed exposure to different types of bonds, issued by governments and companies. This results in a highly diversified portfolio which can perform well in different market conditions. It is managed by the experienced Ian Spreadbury who is supported by Fidelity’s considerable global fixed income team. The combination of the Fund’s strong management and consistent performance has resulted in an AA rating from Standard and Poor’s (S&P) and an A rating from Old Broad Street Research (OBSR). The structure of the fund means it is suitable for cautious investors looking for a relatively stable return or as a diversifier used in combination with shares-based funds.
Fidelity Multi Asset Strategic Fund is a relatively cautious fund that should offer decent returns with relatively low volatility over the long-term. It invests in a diverse mix of assets including shares, bonds, property, cash and commodities. Portfolio Manager Trevor Greetham has many years’ experience and actively ‘tilts’ the fund towards the investments that he believes are best suited towards the current environment. The fund has achieved an A rating from both Standard & Poor’s (S&P) and Old Broad Street Research Ltd (OBSR), both highly respected and independent fund rating companies.
AXA Framlington UK Select Opportunities is a strongly performing UK equity fund offering exposure to a range of UK companies which are selected for their potential to produce high capital growth. Nigel Thomas has managed the fund since September 2002 and has managed funds of this type successfully for many years previously. The Fund has an AAA rating from OBSR.
First State Asia Pacific Leaders Fund aims for long-term capital growth from investment in companies from the Asia Pacific region (excluding Japan). This is a highly rated fund managed by a long-standing investment team specialising in Asian shares. The Fund has consistently been one of the top performers in its sector and offers exposure to the strong growth potential of the Asia region. The fund has achieved the highest possible AAA rating from both S&P and OBSR.
Neptune Global Equity is a comparatively concentrated fund which aims to generate capital growth by investing in companies from around the world. Robin Geffen, who has managed this fund since launch in December 2001, has an unconstrained approach and will invest in the markets, sectors and stocks he thinks will benefit from macroeconomic themes. The unconstrained approach and strong performance has led to an AAA rating by OBSR. This aggressive fund is suitable for adventurous investors taking a long-term view and comfortable investing outside of the UK stockmarket.
Investing for income?
M&G Optimal Income Fund is a flexible portfolio which aims to invest in the best type of bond for the prevailing market environment to offer a high, consistent income and capital security. It is managed by Richard Woolnough, who has over 22 year’s experience, and is supported by a dedicated team of bond specialists. The flexible nature of the fund, together with the managers’ experience and strong performance has earned this fund an AAA rating from Standard & Poor’s and an AA rating from OBSR. The fund currently offers an attractive yield of 4.78%.
Invesco Perpetual Monthly Income Plus Fund aims to provide a high income through exposure to high yield bonds and equities. It is managed by three of the leading managers in the UK: Paul Causer, Paul Read and Neil Woodford. The Fund has an AAA rating from OBSR and an AA rating from S&P and currently yields 7.66%. High yield corporate bond funds offer a high income but can be more volatile than government or investment-grade bonds. The fund would therefore be suitable for an investor looking for a high income who can accept a higher degree of risk.
Invesco Perpetual Income is a UK equity fund which seeks to achieve an income in excess of the broad UK equity market with the potential for capital growth. The Fund is managed by Neil Woodford, one of the longest serving and most successful managers in the UK. The Funds strong long-term performance and experienced manager have resulted in AAA ratings from both S&P and OBSR. The fund currently offers a yield of 3.82%.
Newton Global Higher Income aims to achieve a rising income together with the potential for capital growth by investing in dividend paying companies from around the world. Newton is a well-known investment firm with a significant investment research team who scour the world for investment opportunities. The Fund has an AA rating from both S&P and OBSR. The fund currently offers a yield of 4.90%.
Schroder Income Maximiser is an innovative equity fund that offers the potential for a high income and some capital growth over the long-term. The Fund produces this high income by combining company dividends with investments called derivatives. While derivatives can in some cases add extra risk, this fund uses them only to increase its income in a relatively low risk manner. The fund has achieved its stated 7% income target in each calendar year since launch. The fund is suitable for higher risk investors seeking a very high level of income.
Please note that performance of the funds listed above cannot be guaranteed. Capital values and income can all go down as well as up. The information on this page is intended for information only and does not constitute personal advice. When you are considering making a lump sum investment or saving regularly it is important to ensure the fund meets your attitude to risk and your objectives. Please contact us for more information on these funds or to arrange an appointment to discuss your investment options.
OBSR (Old Broad Street Research) and S&P (Standard and Poor’s) are independent companies who regularly research investment funds and provide them with a rating from A-AAA. Their views are there own and are not intended as a recommendation.
The opinions in this article are those of the author and are not intended as personal advice. Protection & Investment Ltd is authorised and regulated by the Financial Services Authority.
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“ I knew very little about investing and previously picked funds with a random approach. Neil understands my needs and has found funds that not only give good returns but also meet my timescales - Miss N, London ”
