Investing in ISAs
Does an ISA investment make any sense at all ?
The answer to this question depends on whether you want to
maximise both your returns from capital and income and, most
importantly, are willing to take a long term view. Taking a long
term view means that you allow the simple effect of compounding to
do its magic in a tax free environment. So what type of ISA
investment, cash, bonds or equities? The current low interest rate,
high inflation environment indicates that equities remain
reasonably priced on average and are the most attractive asset
class - the best source of yield and inflation protection in our
opinion. That said, we are cautious about prospects for the average
business given rising costs, government spending cuts and a
consumer under pressure from higher taxes and inflation. Care needs
to be taken to identify very high quality businesses that can
generate steady earnings growth and that are relatively well
insulated from any turbulence in the economy at large.
Having made the decision to make an equity investment you are
faced with a limit of £20,000 or £1,666 per
month. This amount would allow approximately £500 per
stock before charges to obtain some diversification. At this level
the dealing charges will have a direct impact on your return.
You can access high flying shares by investing in unit trusts
or OEICs which are fully ISA compliant and can take advantage of
the full listing of London Stock Exchange and AIM stocks. In
addition, they provide all the advantages of diversification,
institutional dealing costs and professional management.
ISA Terms & Conditions
The opportunity for eligible investors to shelter assets from
income and capital gains taxes on an annual basis can make a
substantial positive impact to an investor's net worth. The
2019/2020 ISA limit may not seem like a substantial figure to some
investors, but the compounded benefits of tax free savings over
time make the ISA an essential investment vehicle.
High growth, high yield companies are unusual but can be found,
oftentimes in niches within the UK economy that continue to offer
exciting prospects. Our investment process aims to seek out such
companies. We offer three pooled funds: