Background
06/02/2025 – This is my Stocks & Shares ISA consisting of over 30 managed funds. I charge the ISA 0.5% per annum of fund value for an investment performance review. The yellow line shows value after costs and the blue dotted line shows gross contributions. Green block shows money taken out. Everyone’s ISA will perform differently depending on funds held, amount invested, timescale and charges. £500 per month goes in (at the start it was only £50pm.) I sometimes make additional, lump sum contributions (£10,000 was added in September 2024) and have withdrawn money in the past.
Commentary
Portfolio has grown c. +12.63% over the year (excluding additional contributions). Over the last 12 months, investors decided inflation and global conflict were unlikely to escalate out of control in the near term. There has generally been a sense the new Trump presidency might be business friendly – especially if you hold US shares. In the UK, the new Labour government have declared growth is their priority and Asia and Europe are also making every effort to catch up, albeit from a relatively low point.
As ever, there are clouds on the horizon. Interest rates have not fallen as far or as quickly as expected. This means Fixed Interest fund values have not performed as well as expected. “Tariffs” also have the power to sow uncertainty as global trade relations change and investors worry about who is likely to lose out..
ISA benefits
The 2024/2025 UK ISA allowance is £20,000. Consider using up as much of this as possible before the 5th April 2025 deadline. If you do not wish to invest the full amount, you can fill up any unused allowance with a Cash ISA.
The obvious advantage of an ISA is the fund is invested in a virtually tax free environment. If you are a non tax payer, have capital gains below the annual allowance, receive less than £500 p.a. in dividends, or make a loss – these may not seem like advantages. However, it may still be worth placing money into an ISA to protect you from future tax charges and admin. ISA money does not need to be included in a tax return.
Compare with last year’s ISA graph
Warnings & Caveats
This investment suits me but may not suit you. It’s value can fall, so can the amount of income it produces. I never recommend you invest in anything without first seeking proper regulated advice – unless, of course, you fully understand the risks and have the capacity to accept the loss.
If you have your own ISA, it may perform differently for the reasons given above.
ISAs are not much use against Inheritance tax as they form part of your estate on death. However, spouses can “inherit” each other’s ISA fund value as an allowance
Please note, I also keep a Cash ISA going for Emergencies. Capital value should be safe from volatility but maybe not from inflation, in the longer term. Cash returns have improved in the last couple of years.
I can’t predict the future..