Adrian Lowcock, senior investment manager at Hargreaves Lansdown, has put forward six investment ideas for those yet to use their ISA allowance, as the 2013/14 tax year comes to a close.
With equities having retreated from highs in recent weeks, and gold still 15% lower than a year ago, there are a number of areas investors can look at.
Depending on investors' goals there are a wide range of solutions available.
Below Lowcock outlines five ISA ideas for those with their tax-free allowance still to use, as well as one for junior ISA investors.
1. Newton Global Higher Income, for income investors
Manager James Harries’ overriding objective for the fund is to provide growth in income and capital over time. This fund provides a way to for income-seekers to diversify away from the UK and access countries such as Australia, Canada and the US, where the dividend culture is well established. Given the current defensive positioning, the fund should be better at protecting investors in a falling market.
2. Troy Trojan, for defensive investors
Manager Sebastian Lyon’s focus is on capital preservation. As such, this fund is defensively invested. He aims to achieve a reasonable level of return over the medium term with a little less volatility than other longer term, more aggressive portfolios. Given its defensive nature, the fund performance is likely to lag in strongly rising equity markets.
3. Old Mutual UK Alpha, for medium risk investors
The manager, Richard Buxton, adopts a buy and hold approach, taking a longer-term investment view. He mainly invests in FTSE 100 companies and, as such, this fund may be considered less risky than some alternative UK equity funds. However, because the fund is fully invested in shares, investors might see some volatility, particularly when the manager’s style is out of favour with the market.
4. Newton Emerging Income, for long-term investors
This suggestion is for investors with a long time horizon. Therefore, the focus is on more risky areas with greater potential to build wealth over the long term. However, managers Sophia Whitbread and Jason Pidcock look to reduce risk by focusing on companies able to pay and grow their dividends over time.
5. Cash, for undecided investors
Investors’ ISA allowance is one of the most important tax breaks, and if they do not use it by midnight on 5 April, they lose it. Investors who are unsure where to invest should still open up a stocks and shares ISAs and place the money temporarily in cash, pending investment.Junior ISA
And one for junior ISA investors...
Lindsell Train Global Equity
Managers Nick Train and Michael Lindsell invest in global equities and have a long term buy and hold approach. Focus is on well managed businesses with strong brands.
Lindsell and Train are looking for companies which produce high and stable returns on capital that can be maintained over 10 and 20 years. This compliments those investing for children where the investment timeframe is likely to be in excess of 10 years.
