Updated: January 27, 2020

Best-Performing Stocks and Shares ISAs

Looking to boost the performance of your investment ISA? Find out how to make your money grow more efficiently and maximise its growth in our guide

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Richard Angliss

Author: Richard Angliss - Finance Expert

Updated: January 27, 2020

While the dividends you earn through an investment ISA can be lucrative, you could make even bigger gains and protect your profits by knowing how to enhance the performance of your ISA. Whether you have an existing account or you’re looking for a new venture, there are always opportunities to potentially boost your profits with promising investments.

In this article, we look at ways to raise your ISA’s overall performance, how fees could impact your gains, and how you can find the best ISA for your needs.

Read on for a comprehensive overview or click a link to jump straight to the information you want:

Which factors could enhance the performance of stocks and shares ISA?

How well your ISA performs will depend on the choices you make before and after opening your account. This includes which ISA platform you choose, the investments you pick through the platform, your attitude towards reward vs risk, the length of time you invest your money, and how you plan on managing your account going forward.

If you’re planning on investing in unit trusts, open-ended investment companies (OEICS) and investment trusts through your ISA, its performance relies on the experience of a fund manager and can be strongly influenced by the sector the pooled investment focuses on. But finding a great investment with a trusted fund manager doesn’t have to be difficult – speak to an expert to find out more.

See the sections below for more information about how you could keep the costs down and potentially improve the performance of your ISA.

Invest for the long-term

The longer you can leave your funds in an investment ISA, the better your rates of return may be. This is because your funds will have time to compound – this is when your returns generate returns. Long-term investments can also be beneficial when the markets aren’t performing so well as they have time to recover, in theory.

However, this doesn’t mean that you have to stick with the same ISA for this length of time – in some circumstances, it may be better to transfer to another platform.

See below to find out why.

Transfer out and move to a new ISA

Loyalty is commendable, but if the investments held within your stocks and shares ISA are no longer performing like they used to, it may be time to say goodbye and transfer to another platform to take advantage of lower fees and higher rates, for example.

Number of investments

Some platforms will offer hundreds or even thousands of investment opportunities while others may only provide a handful, and while the former would certainly offer you more variety, it all comes down to how well each one is performing and the dividends offered.

Generally, building a diverse portfolio is recommended to spread your risk and increase your potential profits, though an expert investment advisor can recommend the best ISA accounts and investments to build a varied collection.

Drip-fed money vs lump sums

There are two ways to top-up your stocks and shares ISA: by drip-feeding your funds with small, regular sums, or with larger lump sums over a less frequent period. Which strategy is best comes down to what you’re comfortable with, what you can afford, and your appetite for risk.

Some investors put down an initial lump sum and also invest small regular amounts, while others make lump sum payments every quarter. It could be beneficial to drip-feed your funds as it can help when the markets aren’t performing so well – this a strategy called pound-cost averaging, where you buy more shares when the market is low and fewer when it’s high. Bear in mind that you may have to pay fees if you want to invest a regular sum.

However, a lump sum could give you better rates of return more quickly, so long as you can accept the potential volatility of the investment market.

Combine your ISAs

If you have another ISA (such as a cash ISA), you could transfer any funds from a previous tax year into your investment ISA to increase its value and give you more to invest. Also, the money from the other account wouldn’t count towards your maximum annual allowance, which is currently £20,000 for the 2019/2020 tax year.

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Will fees affect how my investments perform?

Yes, they may do. While your stocks and shares ISA may be exempt from tax, this unfortunately doesn’t mean that you’re free from paying any charges, and higher charges could eat into your profits. Therefore, reducing these costs to potentially increase the performance of your account over a long-term period may be in your best interest.

Below are the main charges you may have to pay:

  • Platform fees: Some providers will charge you a fee to invest through their platform (whether you opt for regular, small payments or lump sums), which could be a percentage of your fund’s value or a fixed rate.
  • Fund manager fees: You may be charged a levy fee for the fund manager’s service, which could be up to 1% of the value of your fund.
  • Transfer out fees: Some providers may charge you a fee if you decide to switch platforms while others won’t.
  • Buying and selling fees: You may have to pay a small fee every time you buy or sell a fund, though if you have multiple funds, this could make a large dent in your profits.

Some or all of these fees may apply, depending on the ISA provider you choose. However, if one fee is high and the others are much lower, don’t be immediately put off from investing in that ISA as it could be more cost-effective overall, which is why it’s vital that you know how much you would be charged before you open an account.

We work with independent financial advisors who can help you find the best ISAs to suit your needs and highlight any charges associated with each account. Make an enquiry and we’ll match you with an expert for a free, no-obligation chat.

How can I find the top-performing stocks and shares ISA in 2020?

Because ISAs are tailored to your requirements, there isn’t one ISA which performs best overall. An internet search will bring up thousands of results for ‘best performing ISA’, though knowing which one would be ideal for you isn’t so straightforward.

You could research each ISA and its investments to ensure you get the right one, but this would be a labour-intensive and time-consuming task.

Instead, you could make things far less complicated by working with a financial advisor.

Speak to an expert

Investing through the right stocks and shares ISA could spell the difference between growing and prospering from your investments or coming away with less than you originally started out with. But by speaking with the right financial advisor, you could get an ISA with investments that are anticipated to perform well for you.

So, whether you want to invest by yourself, with a provider or want someone to make investments on your behalf, the advisors we work with can make this possible.

Call 0808 189 0463 or make an online enquiry and we’ll match you with an expert for a free, no-obligation chat about your ISA options.

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We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in ISAs. Ask us a question and we'll get the best expert to help.

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Richard Angliss

Richard Angliss

Finance Expert

About the author

Richard Angliss has made a career in financial services which stretches over 40 years.

His early career was spent learning about the various financial products and applying them to prudent advice, working for one of the largest life assurance and investment firms. After that he joined the financial services arm of a very well-known firm providing independent advice to their 8 million customers.

For the last 20 years he has been involved in building software solutions that help Advisers and clients work together to achieve good financial outcomes and helping to set up three independent advisory firms. He also has written many articles for financial services publications and provided commentary for newspaper journalists.

At an early stage in his career he realised the great satisfaction that comes with being able to help people achieve their goals and protect their families. “Regulation of financial services has hugely impacted on ensuring people get appropriate advice. The issue these days is access to that advice and just as importantly regular reviews to make sure that everything stays on track”.

With the growing development of online resources such as Online Money Advisor he sees a great future for people to access advice to make their pension and investment work harder for them.  Plus, of course, to ensure they have insurance products in place that will be required when unforeseen events happen.

He knows getting that balance right is crucial to prudent financial planning and the wellbeing of individuals and their families.

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*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

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