Funding your ISA is an important first step in tapping the wealth-generating potential of financial markets without the worries of tax.
However, taking the plunge and selecting the investments you want to put your money into can be hard. For lots of people funds are an obvious starting point as, unlike individual stocks, you can achieve a level of diversification and avoid the risk of having all your eggs in one or just a few baskets.
Even here though, the amount of choice on offer can be intimidating. One way of getting some pointers is to look at what other people have been investing in.
What’s popular with other investors?
The most popular external funds, investment trusts and exchange-traded funds (ETFs) on the AJ Bell platform among AJ Bell DIY investors are listed in the table.
What’s clear is that products which offer low-cost diversified exposure to global markets have a place in lots of people’s portfolios. Fidelity Index World, for example, offers exposure to the 1,500-plus companies in the MSCI World index for an ongoing charge of 0.12%. As with most global funds, it is heavily dominated by the US market.
Other popular vehicles include Fundsmith Equity, whose approach is built around holding what it considers high-quality stocks for the long run, and investment trust Scottish Mortgage Investment Trust, which aims to identify investments with long-term growth potential, including names which are not currently listed on the stock market.
Where else can you look?
Using AJ Bell’s screening tools for funds, ETFs and investment trusts can help you narrow the field using criteria like performance, fees, region, investment style or yield. Click on the advanced filters option to get the full list of options.
Another avenue is to look at AJ Bell’s list of Favourite funds built by our very own investment experts. These products have been researched to check the managers follow a clear process, have a consistent track record of performance and understand how to manage risk. The selections are regularly monitored and updated where required. You can filter the favourite funds for things like investment goal, sector or charges.
AJ Bell also has its own range of multi-asset funds. This selection includes growth funds designed to suit different risk appetites, by holding a mix of equities, bonds and other assets like cash. Additionally, there are income funds which pay investors monthly while either seeking to maintain the value of the investment or take on more risk with the aim of growing the value of the investments.
Tom Sieber: Content editor
Tom Sieber is AJ Bell's Content Editor. He was previously the Editor of Shares Magazine. He has been with the business since 2012.
Tom is a regular contributor to the AJ Bell Money & Markets...
