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Where are our experts investing their ISA allowance?

08 March 2021

4 minute read

Where Barclays experts invest their ISA allowance.

Who's it for? All investors

The value of investments can fall as well as rise. You may get back less than you invest. Tax rules can change and their effects on you will depend on your individual circumstances.

What you’ll learn:

  • Ideas on how to invest your ISA allowance
  • Why a MultiManager/ready-made fund is worth considering for your portfolio
  • How investments can reflect your environmental and social values.

Investors may now be looking for fresh ideas for their incoming £20,000 Individual Savings Account (ISA) allowance in April.

Equally if you have any unused allowance from the current tax year you may be planning to invest in the next few weeks to avoid losing it forever.

Many savers might have more to invest than usual after a year of lockdowns during which normal spend has been drastically curtailed.

With fewer opportunities to eat out, go shopping, buy tickets to the theatre or go on holiday, some investors have more cash to shelter in a tax-efficient ISA.

To help with some inspiration, a panel of our own experts at Barclays agreed to share how they invest their ISA allowance. Here’s what they said.

Please note that what's right for our experts may not be right for you. These reflect their own views and should not be taken as advice. Always invest based on your own circumstances and, if unsure, speak to a financial adviser. We do not guarantee returns and past performance is not a reliable guide to future performance.

Will Hobbs, Chief Investment Officer

My ISA investments are a matter of practicing what I preach – having a diversified portfolio. Whatever spare savings my wife and I can cobble together we tend to deploy into a MultiManager fund. The reasons here are very simple. The best way for us mere mortals to profit from any incoming ingenuity – from the humble excel spreadsheet to the uniform shipping container on to whatever amazing advances in Artificial Intelligence, health tech or robotics lie in the future – is to own a stake in the many companies that stand to benefit. It’s not possible to know when or where the next technological breakthrough will occur, so for my ISA I’m looking for globally diversified exposure.

I don’t have the time (or the expertise) to replicate the impressive diversification that a MultiManager team designs, stress tests and embeds into their multi-asset class funds. Neither can I hope to mirror the analysis a MultiManager team carries out in selecting and blending the right funds together. Similarly, the teams that research and implement the various tactical tilts, which aim to provide those extra cherries of performance. I am privileged enough to be able to watch all of these teams in action at Barclays, where they manage a suite of MultiManager funds – also known as ready-made funds. The upshot is that a MultiManager fund is the single best expression of everything we advocate about long-term investing – take an actively managed approach and leave it to the experts. Quite simply, I plan to buy and hold.

Clare Francis, Director of Savings & Investments

Having been investing for about 15 years, I have built up quite a diverse portfolio and have money spread across a number of funds that invest in different geographical regions and sectors. When deciding where to invest my ISA allowance, I tend to look at how my existing investments are doing and see whether there are areas I need to top up to make sure my portfolio is well balanced. For the current tax year I’ve invested in three funds - two of which I already had money in – a global and an Asian fund. I decided to add to the global fund because a large proportion of it is invested in US technology companies, which have been doing well so far. That said, if the tide turns, the manager can make changes to where he invests so it saves me having to keep on top of things and spend time making necessary adjustments.

I added to my Asian fund because in comparison to some of the other regions I’m invested in, I didn’t have much exposure. I am hopeful that it will do well over the longer term given that it invests in some extraordinarily innovative companies in countries such as Taiwan, China and South Korea.

The third fund I hold is a FTSE 100 tracker. I invested in this one last April at the start of the tax year. It was in the early weeks of the first lockdown when the stock markets around the world had fallen significantly, which for me felt like a good time to invest. I opted for a UK tracker because I expected the market would start rising again at some point, boosting the value of my investment along with it.

I rarely use all of my ISA allowance, but this year I’ve been able to invest more than in recent years due to the pandemic and the fact that I’ve spent less. I’d have rather had a holiday, but you never know, in the future my extra investment might help me have the holiday of a lifetime!

Rob Smith, Head of Behavioural Finance

Even though my job is to understand the ways our judgement can betray our best interests when investing, this does not mean I am impervious to my emotional desires. This is precisely why I choose to invest in funds rather than individual stocks. Like many, I have little spare time to dedicate to personal investments with a full-time job and young family.

My money is currently invested in funds which match my values around the environment and social issues. I want to back companies that are directly trying to solve some of the issues we face by creating new technologies or indirectly through the way they operate, by improving their impact on the environment. One of the biggest focuses here is renewable energy. I am confident that responsible funds that invest in these companies can perform well. But I know this isn't guaranteed.

Although I hold a number of passive investments, responsible investing is an area where I am happy to pay for a fund manager to do the work. Firstly, because it is very difficult to represent values as a set of rules, and time consuming to understand these rules. Secondly, I want my money to support companies that are looking to solve problems rather than just avoiding so-called 'bad' companies that are, for example, not environmentally friendly.

For the coming tax year, I will mainly be looking for equity funds because I have a long-term time horizon, a high risk tolerance and am happy to weather the short-term fluctuations in the hope they will bring higher returns. I will look to add to my broad global market positions through passive socially responsible Exchange Traded Funds (ETFs). I will also be looking for active managers who are aiming to invest in companies who are looking to make a direct impact on the environmental issues we face.

I am always keen to save into my ISA as soon as I can to maximise the time I am invested rather than try and time when to invest. Even if I think companies face tougher times ahead, unless I am really confident everyone else is underestimating this, it will already be factored into prices anyway. I have, on occasion, put money aside but then not got around to investing and missed out on returns (I told you I was human). For the new tax year, I plan to set up regular automated payments to my ISA to avoid a repeat performance.

Mike Haslam, Head of Funds Distribution

Despite working in the investment management industry and having access to some of the world’s most talented fund managers, I just don’t have time to manage my own affairs. Also, I’m easily swayed and fear I would probably just end up buying every single fund anyway.

I need to own more shares than bonds as I am investing for the long term – around 10 years or more. I also want to ensure my portfolio is diversified across all stock markets and – crucially – for the experts to do all the thinking for me. I have opted for just two investment funds for my ISA.

My core holding is a Barclays ‘ready-made’ investment fund that invests in Exchange Traded Funds (ETFs) – which come with very low annual management charges. There are five options of varying risk on the ready-made funds. I have chosen one which has the highest allocation to equities at 80% so I can just leave it to (hopefully) grow.

My second holding is a specialist fund in the technology sector to add a bit of ‘spice’. Technology disrupts and transforms every single activity around us, from internet shopping and music downloads to online banking and home-schooling. I’m sure a fund manager can find ways of making some money out of all this, so I have a small (but exciting and higher risk) investment in an active global technology fund.

I don’t have the full £20,000 to invest every year, so I take advantage of investing a little bit every month by Direct Debit. My eldest child is starting university later this year, so if I find my monthly outgoings start increase I can cut back a bit on what I invest each month. I don’t think many first-time investors appreciate the flexibility of ISAs. I remember the days of savings bonds sold by insurance companies where you were committed to make payments every month, otherwise you lost a chunk of the value.

Notes

We don’t offer personal investment advice so if you’re unsure you should seek that independently.

Funds are designed for the long term so you should only consider them if you can stay invested for at least five years.

These are our current opinions but the future, as ever, is uncertain and outcomes may differ.

Plan & Invest is a new service which creates and manages a personalised Investment Plan just for you. Whether your long-term goal is your child’s university education, retirement or just building a nest egg, all you have to do is tell us a bit about yourself and then, if your application is successful and you’re ready to invest, let our experts select and manage your investments (minimum investment is £5000).

Read the Assessment of Value report [PDF, 683KB] for funds run by Barclays.

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