Most popular ISA funds, shares and investment trusts in 2021

•    Fund investors go for growth in their ISA
•    Baillie Gifford is proving popular with investors this ISA season
•    Lindsell Train out of the top 10 so far this year
•    Investors are split between value and growth on share purchases

Laith Khalaf, financial analyst at AJ Bell, comments:

“Fund investors have been going for growth in their ISA so far this year, filling their tax shelters with a raft of offerings from Baillie Gifford, and of course, the ubiquitous Fundsmith Equity. Rival growth fund Lindsell Train Global Equity looks to have declined in popularity this year, not making the top ten in January and February, after coming in second behind Fundsmith over the same period last year.

“That looks to be in large part to be down to the success of Baillie Gifford’s fund range, which account for half of the top ten most popular ISA funds so far this year. There’s still another month to go in ISA season though, and it remains to be seen whether the shift towards cyclical and value stocks we have seen in the market starts to manifest itself in ISA investments too.

“Certainly the individual shares picked by ISA investors in 2021 exhibit a cyclical flavour, with the likes of EasyJet, IAG, and BP all being stocks that will do well if there is a strong economic recovery. But ISA investors have also picked Tesla and Unilever, and while both have suffered a fall from grace in recent weeks, they are long term winners that have benefited from investors’ focus on future earnings growth. This split between growth and value stocks reflects a dichotomy of views in the market, on whether or not inflationary pressures are building, and perhaps promising a reversal of the trends we have seen in the market for the last decade.

“While the Gamestop frenzy has died down, for now at least, trading activity at the back end of January and early February means it’s still one of the most popular ISA share purchases of the year so far. Cryptocurrency miner Argo Blockchain has also proved popular so far this year, as the Bitcoin price has rallied, and naturally thrown a spotlight onto cryptoassets once again. 

“With just one month to go to fill their ISA allowances, and tax rises looking like they’re in the post, we can expect the usual rush to beat the 5th April deadline. Those who find themselves running out of time should remember they don’t have to make an investment decision before the 5th April, if they need a bit more thinking time. They can just make their ISA contribution and hold it as cash, pending an investment decision when they’ve got a bit more breathing space to consider the options.”

Source: AJ Bell, data collected from ISAs between 01/01-29/02 for each year, excluding AJ Bell funds.