30 March 2021
A Stocks and Shares ISA is a tax-efficient way to potentially grow your money and should be considered as part of your overall wealth planning. But, with such a wide array of investment choice, the hardest part is deciding what to put in them, and whether you should use your allowance early, wait until the end of the tax year, or spread it throughout the year?
Many people leave it until the last minute, it does mean that they will still be able to take advantage of their annual allowance – but by leaving it late, they miss out on the power of the ISA to grow their wealth. At Brewin Dolphin, we recommend striking while the irons hot, and investing your full allowance at the beginning of each tax year rather than at the end. Your investments will then have a whole year longer to potentially grow tax-free. This can add up to a lot of extra money in your ISA if you invest your whole £20,000 allowance.
Now we have entered the new tax year Mike Paul, head of fund research at wealth manager Brewin Dolphin offers five funds to consider putting into your ISA:
Scottish Mortgage – This flagship global investment trust managed by Baillie Gifford is an excellent long-term holding for any ISA. The strategy focuses on companies with the ability to grow rapidly, with the flexibility to invest across the market cap spectrum and even a portion in private companies. Whilst it is true this approach has performed extremely well recently and it could be susceptible to a near term reversal in this market dynamic, we believe it will deliver over the long term.
Fundsmith Equity – Maybe not the most original suggestion given its widespread popularity, but Terry Smith’s concentrated portfolio of high-quality global equities should be a go-to option for any ISA investor. The fund invests in exceptionally large and liquid multinational companies such as Microsoft and Nestlé. The average market cap of the underlying holdings is in excess of £115bn. Smith believes these types of companies provide goods and services that are difficult for other companies to replicate. The end result being they have potential to do well over a long period of time.
Comgest Growth World Fund – This fund looks for long term investment into high quality companies around the globe. The standout element of the strategy is their industry leading ESG integration throughout the process and company engagement activities where appropriate.
BlackRock Throgmorton – This UK smaller companies investment trust would make a good opportunistic addition to an ISA portfolio. The UK market, and smaller companies in particular, have been out of favour for some time, initially due to Brexit concerns and more recently the struggle with the Covid 19 pandemic. However, as our vaccine rollout continues at pace, smaller companies within the UK market may be well placed to perform strongly as the economy reopens and activity returns. There is a good team running this trust and we trust them to capitalise on this opportunity.
Brown Advisory US Sustainable Growth Fund – This fund is co-managed by Karina Funk and David Powell who are focused on looking for fundamentally strong companies with a sustainability advantage to their business models. This sustainable angle to the strategy is potentially well aligned to new president Biden’s Green agenda.
Wayne Berry, investment manager at wealth manager Brewin Dolphin:
“The last 12 months have certainly been among some of the most challenging and volatile in recent years and have had one of the biggest impacts on the economy and financial markets in peacetime history. However, the successful vaccine roll out, along with the continued rise in technology and innovation, record level of consumer savings, and a more collaborative US president, should provide a base for significant improvement in the UK and global economies. There is also a growing appetite for investment opportunities in Asia; China and the surrounding areas have fared well despite being at the epicentre of the coronavirus and have exceptional growth prospects compared with the rest of the world.
“Anyone who plans to put their money away for the medium to long term should consider investing in a stocks and shares ISA. With cash returns at near-record lows, it pays to take on a bit of risk, and if you take advantage of the benefits of tax efficient wrappers, your income and gains will be free from income tax.”
PRESS INFORMATION
For further information, please contact:
Richard Janes richard.janes@brewin.co.uk / Tel. +44 (0) 20 3201 3343
Siân Robertson: Sian.Robertson@brewin.co.uk / Tel: (0) 20 3201 3026
Anita Turland: anita.turland@brewin.co.uk / Tel: (0) 20 3201 4263
Payal Nair payal.nair@brewin.co.uk / Tel: +44 (0) 20 3201 3342
Notes to editors:
Brewin Dolphin offers their own Stocks and Shares ISA at competitive rates with a range of six portfolios that are designed by our own in-house research team. They can be opened online at: https://www.brewin.co.uk/online-investing-with-bps/investment-isa
Disclaimers:
The value of investments, and any income from them, can fall and you may get back less than you invested., Tax treatment depends on the individual circumstances of each client and may be subject to change in the future., Neither simulated nor actual past performance are reliable indicators of future performance., Information is provided only as an example and is not a recommendation to pursue a particular strategy., We or a connected person may have positions in or options on the securities mentioned herein or may buy, sell or offer to make a purchase or sale of such securities from time to time. In addition we reserve the right to act as principal or agent with regard to the sale or purchase of any security mentioned in this document. For further information, please refer to our conflicts policy which is available on request or can be accessed via our website at www.brewin.co.uk., We will only be bound by specific investment restrictions which have been requested by you and agreed by us.Brewin Dolphin is authorised and regulated by the FCA (Financial Services Register reference number 124444)
Brewin Dolphin is a UK FTSE 250 provider of discretionary wealth management. With £51.4* billion in total funds, it offers award-winning personalised wealth management services that meet the varied needs of our clients including individuals, charities and corporates.
We give clients security and wellbeing by helping them to protect and grow their wealth, in order to enrich their lives by achieving their goals and aspirations. Our services range from bespoke, discretionary investment management to retirement planning and tax-efficient investing. Our focus on discretionary investment management has led to significant growth in client funds and we now manage £44.6* billion on a discretionary basis.
Our intermediary business manages £15.8* billion of assets for over 1,700 advice firms either on a discretionary basis or via our Managed Portfolio Service and the MI Brewin Dolphin Voyager fund range.
In line with the premium we place on personal relationships, we’ve built a network of 34 offices across the UK, Jersey and Dublin, staffed by qualified investment managers and financial planners. We are committed to the most exacting standards of client service, with long-term thinking and absolute focus on our clients’ needs at the core.
For more information, visit: www.brewin.co.uk
*as at 31st December 2020