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As part of City AM’s series on ISAs, we asked Camilla Esmund, senior manager, interactive investor to gather some Stocks and Shares ISA* inspiration from the experts.
Interactive investor is the second largest platform in the UK for private investors*. The platform has some of the lowest fees on the market and is currently offering £100 in free trades* for investors who open an account before the ISA deadline.
More on ISA’s from City AM:
Why ISAs and pensions make a ‘perfect combination’
Should I invest for my child’s future with a Junior ISA?
Should I get an Innovative Finance ISA?
These are just ideas that investors in different stages of their journey* may want to consider. For more information, you can have a look at ii’s Super 60 list.
Crucially – always understand what you are investing in before you invest – investments can go up and down, and you may end up with less than you originally invested.
Stocks and Shares ISA ideas for new investors
SPDR MSCI World ETF
For those new to investing, gaining broad exposure to global stock markets is a great place to start.
This fund tracks the mainstream MSCI World Index, which comprises nearly 1,400 large and mid-cap listed companies. As a worldwide developed market index, investors should be aware of the focus on the United States, with an allocation of over 73 per cent to that country.
With an ongoing charge of 0.12 per cent, fund fees are very competitive. The index offers a soundly constructed and reasonably representative portfolio of global equities, covering approximately 85 per cent of the free float-adjusted market capitalisation in each of 23 developed market countries.
Those wanting to ‘spice up’ their ISA portfolio
Vanguard Global Small-Cap Index Fund
Smaller companies, while often overlooked, can provide investors with opportunities for superior growth potential and offer an exciting avenue for investors looking to diversify their portfolios.
This fund tracks the MSCI World Small Cap Index, which comprises nearly 4,000 small cap listed companies. As a worldwide developed market index there is a focus on the United States, with an allocation of over 63 per cent to that country.
With an ongoing charge of 0.3 per cent fund fees are reasonably priced, and the index offers a soundly constructed and reasonably representative portfolio for global small-cap equities, covering 23 developed market countries.
One for more experienced Stocks and Shares ISA investors
JPMorgan Japanese Investment Trust
For those looking overseas, compared to other developed markets Japanese equities may still be considered relatively undervalued, offering potential for further price appreciation.
Many international investors remain under-exposed to Japanese equities, if this turns around it could act as catalyst for further market appreciation as more capital flows in.
The JPMorgan Japanese Investment Trust (JFJ) provides investors access to a portfolio of high-quality companies that aim to compound their earnings sustainably over the long term.
Nicholas Weindling has managed this strategy since December 2007 and is supported by a well-resourced investment team which includes 11 portfolio managers and 15 sector analysts.
The team seeks to tap into the long-term story of Japan’s structural economic transformation by investing in high-quality innovative companies in sectors such as robotics, materials, healthcare, e-commerce and business services, as well as companies transitioning to more capital efficient business models.
The team covers about 400 Japanese stocks, which are classified as premium, quality, trading or structurally challenged, depending on their economics, duration of value creation, and governance quality.
The fund is concentrated with 50-60 holdings, and this high-conviction approach has added value over the long run, although it may also result in volatile results in the short run.
Goldman Sachs India Equity Portfolio
Emerging markets are often a hunting ground for investors who are seeking growth. Over the past decade the Indian economy and stock market has seen substantial growth and is now one of the most highly valued markets in the world.
This premium is a consequence of investor confidence, strong fundamentals, and capital flows to this region. In a market with such rich valuations, investors could benefit from adding exposure via an active fund which aims to find value in an already elevated market.
The Goldman Sachs India Equity Portfolio is one way to gain exposure in a Stocks and Shares ISA to this thriving region and benefit from a highly experienced manager in Hiren Dasani. The fund has delivered strong performance consistently, over multiple time periods.
It is benchmarked against the MSCI India IMI index and has outperformed this index in four of the last five calendar years. Looking further out, the fund also outperformed this index and peers over five and 10 years. This is a well-diversified multi-cap portfolio with a bias towards the small and mid-cap space.
The team seek to invest in sound businesses of all sizes, preferring companies with strong competitive advantages and low or decreasing competition. Company meetings are a crucial part of the process and the team’s ability to meet companies on the ground in India differentiates it from many competitors.
The information above is for educational purposes only and should not be considered financial advice.
If you are unsure, please speak to a qualified financial advisor.