Ideas for topping up your ISA

Now halfway through the tax year and with the Budget looming bringing potential tax changes, investors might be tempted to review – and top up – their investments.

While twice as many Smart Investor customers have already put their full £20,000 Individual Savings Account (ISA) allowance into their Investment (Stocks & Shares) ISA so far this tax year compared to by this time last year, there are still many investors with allowance to use up.

A Barclays study¹ revealed that 13 million UK adults are holding £430 billion of “possible investments” in cash deposits.

If you do have plans to top up your ISA, you might be looking for investment ideas rather than putting more into existing holdings. Investing in a single company can be risky, but by investing in a pooled fund which holds shares in a wide range of companies you can spread your risk.

Active funds focus

Portfolio Manager at Barclays Stephen Peters has compiled a selection of actively managed funds for investors to consider. Starting with one that focuses on UK companies – the others go much further afield.

These funds are for consideration as part of a balanced portfolio and do not represent investment advice.

JO Hambro UK Equity Income fund

“The UK stock market has become overlooked by global investors in recent years,” Peters explains. “Ongoing political changes and a stock market that lacks sectors like technology that are ‘in vogue’ has meant that money has flowed out of the UK equity funds for some time. Despite this, it is still possible to find good returns.

“Joint fund managers Clive Beagles and James Lowen tend to lean away from the largest UK companies which has meant that performance in recent years has been underwhelming. But the managers have stayed true to their strategy, and more recent returns are much better.”

“This is a fund management team we have rated highly for many years, and one we think is best placed to take advantage of any improvement in sentiment towards investing in UK shares.”

Fidelity Asia Fund

This fund invests in companies located across Asia, excluding Japan, stretching from India and China to Indonesia and Thailand.

“Asia is simply too big for investors to ignore,” Peters explains. “As well as being home to most of the world’s population, this diverse range of countries is also home to some of the world’s leading technology and manufacturing companies in the fastest growing areas of the global economy.”

“The region remains at the forefront of many structural growth trends with leading technology business integral to global technology supply chains.”

Peters says the things that sets the Fidelity Asia Fund apart includes that the manager Teera Chanpongsang has a long and successful track record in fund management and that the team and manager have followed the same robust investment process for years.

Barclays Global Access Emerging Market Equity Fund

This is a Multi-Manager fund, so instead of the Barclays manager choosing individual shares and bonds to invest in, their job is to choose which specialist fund managers to select to look after parts of the fund.

Peters explains: “Emerging Markets offer investors access to some of the most populous and fastest developing countries in the world, from Asia to Latin America, Europe, Africa and the Middle East. Countries in Emerging Markets remain at the forefront of many growth trends. The aim of the Global Access Emerging Market Equity Fund is to give broad exposure to Emerging Market stock markets, utilising the skills of who we believe are some of the best fund managers in this area of the market.”

Barclays US Small and Mid Cap fund

Peters explains that small and mid-cap companies in the US have been overlooked by investors for some time, while other parts of the market – such as the Magnificent 7 (Amazon, Apple, Google parent Alphabet, Meta Platforms, Microsoft, Nvidia and Tesla) – have been the talk of the town.

He explains: “A cut in interest rates in the United States, couple with valuations that are seen by commentators as attractive could lead to the sector receiving more attention. We think the Barclays UK Small and Mid Cap fund is well placed to take advantage of a set of attractive conditions for US Small and Mid Cap markets.”

Four funds for 2024

At the beginning of 2024 we highlighted some funds that had the potential to capture some of the prominent investor themes for 2024, including the advancing of AI and potential opportunities in the US.

Decision time

As well as the funds we have highlighted in this article you can find thousands of different funds to choose from on Smart Investor. The funds we mention here are on our Funds List, where you will also find tracker funds as well as actively run funds.