Investment ideas for last minute ISAs

The annual ISA allowance is one of the most important tax breaks available to investors, and if you don’t use it by 5 April you will lose it. This year, the ISA allowance has been increased to £15,000, so with only a few weeks remaining before the end of the tax year, it really does make sense to utilise any tax-efficient allowances while you can.

Here, investment director Chris Mayo has chosen 5 funds he believes could make an excellent choice for last minute ISAs:

Income Investor – Newton Global Higher Income

At a time of record low interest rates and government bond yields, many investors continue to seek a growing income from their investments and so have moved towards equities. The Newton Global Higher Income fund, managed by James Harries, currently yields around 3.5% and aims to grow the income and capital over the long term. The fund invests in companies from around the world, with its largest weighing currently in the US, so offers a good diversifier away from the UK, whilst its typically defensive positioning should do better at protecting capital in volatile markets.

Growth Investor – Schroder European Opportunities

Despite the concerns over a potential Greek exit from the Euro, the ECB €1.1 trillion stimulus program should be supportive to European equities. The Schroder European Opportunities fund, managed by Steve Cordell, follows an investment approach based around the business cycle and identifies the companies that will benefit from it. The fund currently has its biggest country exposure to France, Germany and Switzerland, with its biggest sector positions in financials and healthcare.

Long Term Growth Investor – JP Morgan Emerging Markets

Emerging market equities have been out of favour for some time, but do appear to be at an attractive entry point based on current valuations for investors prepared to accept their high risk nature and invest for the long term. The JP Morgan Emerging Markets fund, led by Austin Forey as part of a large emerging markets team at JP Morgan, is currently overweight to India and has a bias towards the emerging market consumer.

Defensive Investor – Threadneedle UK Absolute Alpha

Investors with capital protection in mind may wish to consider an absolute return fund which aims to make a stated return above cash over a certain period or target low volatility. The Threadneedle UK Absolute Alpha fund, managed by Chris Kinder and Mark Westwood since its launch in 2010, only invests in UK equities, but also has the ability to use derivatives with the portfolio to short positions. The fund aims to provide a positive return over any 12 month period, which it has done since launch.

Undecided Investor – Cash

With £15,000 to invest within a tax-efficient wrapper this tax year, investors who are unsure where to invest should still open up an ISA and place the money temporarily in cash pending investment rather than lose this years allowance.

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