The best 25 funds for your Isa – picked by our experts (2023)

It's tough for investors right now. Inflation remains at levels not seen since the 1960s. War continues to rage in Europe, the banking sector has been rocked and businesses remain paralysed by fear over whatever the next economic shock will be.

In a changing world, investor portfolios must change with it; even amid uncertainty, decisions have to be made.

Telegraph 25, the list of our favourite investment funds, has always been designed to withstand a changing world. It is a mixture of funds that we believe will grow your money in the long run, funds that provide income, strategies that will save your savings when markets fall and funds we think offer an exciting opportunity.

And once you've picked what funds you want in your Isa, use our heat map to work out whether you could be saving money by switching Isa providers.

We aim to choose fundsthat can stand the test of time. Even with so much uncertainty right now, these will do what we need them to.

As ever, investors must remember this list is not an off-the-peg portfolio to pump your money into and forget about.

DIY investing requires you to understand the risks you are taking and conduct your own research to ensure that an investment fits your needs and blends with others that you already hold.

Neither do we recommend buying all the funds on the list at the same time. The funds, and their aims, must be considered and match the aims and objectives of the investor.

Some funds on the list have been chosen expressly because they can be relied on to do several jobs well without the need for close monitoring. Others, however, take more risk by design.

The Telegraph 25 is designed to highlight investments that are the best in the field they operate in and we believe will give the best returns for the risk being taken. Unless we make clear to the contrary, they are intended for long-term investors who want a home for their money for five, 10 or even 20 years.

We have divided the list into five sections: British funds, world funds, income funds, “get rich slow” funds and “wild cards”.

1. iShares UK Equity Index

“Passive” funds, which track the performance of a particular market rather than employ a fund manager to try to beat it, are a low-cost option. For access to Britain’s stock market, this fund is hard to match.

Charge: 0.05pc |Cheapestshare class: D| Five-year return: 24.7pc

2. Jupiter UK Alpha

This fund’s name has changed repeatedly but the manager has stayed the same. Richard Buxton has invested in Britain’s biggest blue-chip stocks for more than three decades and his “value” investment style has recently come back into favour: the fund is among the top 25 per cent of its peer group over one, three and five years, according to FE Fundinfo, a fund information service.

Charge: 0.85pc | Cheapestshare class: I| Five-year return: 21.8pc

3. Liontrust Special Situations

Managers Anthony Cross and Julian Fosh invest in British companies of all sizes and few have matched their record over the past decade. Their fund is among the best 25 per cent of the peer group over five years.

Charge: 0.81pc |Cheapestshare class: I| Five-year return: 29.6pc

4. Fidelity Special Values

Alex Wright, manager of this investment trust, has returned to form after years of struggle; the fund has outperformed 75 per cent of rivals over one, three and five years. Value stocks remain Wright's bread and butter and his longer-term record is impressive. Underpriced small and medium-sized British firms feature, as do FTSE 100 blue chips.

Charge: 0.69pc | Ticker: FSV | Five-year return: 21.7pc

5. Marlborough UK Micro Cap Growth

An option for those who want to benefit from the growth offered by Britain’s smallest companies. Veteran Giles Hargreaves has stepped down from the fund but his successors invest in the same way. However, performance has slipped over the past two years and the fund is only in the upper half of its peer group over three and five years. It's one we'll keep an eye on.

Charge: 1.55pc* |Cheapestshare class: P| Five-year return: 8.1pc

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6. Legal & General International Index Trust

This passive fund invests in more than 2,000 companies that make up overseas stock markets. Held alongside the iShares UK Equity Index fund, it would give investors access to the world’s shares at a low cost.

Charge: 0.13pc*|Cheapestshare class: C| Five-year return: 54.7pc

7. Scottish Mortgage

This standout trust made its name backing fast-growing companies that revolutionised their industries. The portfolio is struggling at the moment but that should not deter investors: few funds have the same depth of experience in identifying the small group of truly world-changing companies, such as Tesla and Moderna.

Low charges and access to unlisted companies make this a must-have in any growth portfolio.

Charge: 0.32pc | Ticker: SMT | Five-year return: 66.7pc

8. Fundsmith Equity

Investment star Terry Smith’s mantra of “buy good companies, don’t overpay, do nothing” has delivered stellar long-term returns. As a “growth” fund it has suffered recently but less so than many rivals and it remains among the top 25 per cent of its peer group over five years. It remains worthy of its relatively high charge.

Charge: 0.94pc|Cheapestshare class: I| Five-year return: 62.9pc

9. JP Morgan Emerging Markets

Veteran manager Austin Forey, an investor in emerging markets since 1994, runs this £1.4bn investmenttrust. An outperformer during the pandemic, returns have become more in line with rivals over the past year, so while it remains on our list for now it's another one to monitor.

Charge: 0.84pc | Ticker: JMG | Five-year return: 38pc

10. The Global Smaller Companies Trust

Its heritage stretches back 133 years (it formerly bore the BMO name and is now run by Columbia Threadneedle) and this investment trust offers access to smaller stocks traded on markets around the world. If you invest for long periods,smaller companies have historically tended to produce better returns than larger ones. Manager Peter Ewins invests in funds run by specialists, including those not available to DIY investors.

Charge: 0.88pc | Ticker: GSCT | Five-year return: 18.2pc

11. iShares Core S&P 500 Ucits ETF

The US market is hard to beat, as managers and their investors have found out. This passive exchange-traded fund tracks the S&P 500 index of the largest stocks in the world’s biggest economy at a very low cost.

Charge: 0.07pc |Ticker: CSP1| Five-year return: 73pc

12. Baillie Gifford Positive Change

This relatively young fund delivered high returns from fast-growing companies during the pandemic but is another to have fallen hard since, although it remains a top-25 per cent performer over three and five years. It deserves consideration, even if the social impact of investments is not a primary ­concern.

Charge: 0.54pc | Cheapestshare class: B | Three-year return: 115pc

13. Premier Miton European Opportunities

Yet another fund to have had a strong pandemic, only to slip back since. While the fund, which focuses on quality companies the managers hold for a long time, remains in the top 25 per cent of peers over three and five years, it's one to monitor.

Charge: 0.82pc | Cheapestshare class: B | Five-year return: 62.5pc

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14. TR Property

TR Property is an unusual trust in that the bulk of its portfolio is made up of shares in European property companies but it also owns some buildings in the UK. Managed by the veteran investor Marcus Phayre-Mudge, it yields 4.4pc and crucially held its dividend during the pandemic and recent market falls, making use of its reserves. Like all property funds, this one has suffered severe falls over the past year but for those who want exposure to the sector it remains a firm choice.

Charge: 0.84pc |Ticker: TRY | Five-year return: -1.5pc

15. New: BioPharma Credit

This unusual listed fund lends money to young drug companies, often before they have had a commercial success. While this may sound risky, the fund has never suffered a default. Yet it can charge high rates on its loans, hence its own generous yield of 7.3 per cent. It replaces the TwentyFour Dynamic Bond, whose performance had become pedestrian and whose yield is lower.

Charge: 1.2pc | Ticker: BPCR| Five-year return: 38.9pc

16. Artemis Income

Offering a yield of 4 per cent, this £4.1bn fund has consistently beaten the average returns of rivals and the stock market. Managers Adrian Frost and Andy Marsh invest predominantly in FTSE 100 stocks and have decades of experience between them.

Charge: 0.8pc* | Cheapestshare class: I| Five-year return: 25pc

17. Man GLG Income

Henry Dixon, manager of the £1.4bn fund, does not confine his search for income to blue chips: British “mid-cap” and smaller stocks make up almost 40 per cent of his portfolio. Between his experience, a yield of 5 per cent and the fund holding up in tough markets, it remains an evergreen and reliable option.

Charge: 0.9pc| Cheapestshare class: D| Five-year return: 25pc

18. Invesco Monthly Income Plus

A mix of bonds with a small portion of shares (currently around 8 per cent) produces this fund’s 5.7 per cent yield, paid monthly. The £2bn portfolio produces income from a range of sources, offering something different from rivals.

Charge: 0.67pc*| Cheapestshare class: Y| Five-year return: 13.2pc

19. City of London

No investment trust boasts a better dividend record than City of London. It has raised its payout in each of the past 56 years and offers a high yield of 4.7 per cent.

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It invests mainly in British stocks that belong to the FTSE 100. The trust is a solid income pick and remains a firm favourite.

Charge: 0.74pc| Ticker: CTY| Five-year return: 23.9pc

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20. New: Personal Assets

“Our policy is to protect and increase (in that order) the value of shareholders’ funds over the long term.” So runs this investment trust's mission statement and, while no investment can offer a completely smooth ride, it has delivered on it admirably over the long term. It replaces RIT Capital Partners, whose large holdings in relatively immature unquoted businesses recently caused this newspaper's Questor column to question its wealth preservation credentials and rate it a “sell”.

Charge: 0.73pc| Ticker: PNL| Five-year return: 26.2pc

21. Vanguard LifeStrategy

Few options are cheaper and simpler than Vanguard’s LifeStrategy range for passive investors. Each of the five portfolios invests a different portion in shares, from 20 per cent to 100 per cent, with the remainder held in bonds. Both portions of each fund are invested in Vanguard tracker funds. About the simplest and cheapest “multi-asset” fund you can find.

Charge: 0.22pc| Cheapestshare class: A| Five-year return: 21.4pc (60pc shares)

22. Ruffer Investment Company

This proved its mettle in 2008, rising when markets tumbled, and has done so again recently. Falling stock markets are the managers’ bread and butter. A great defensive option.

Charge: 1.07pc | Ticker: RICA| Five-year return: 38.6pc

23. HarbourVest Global Private Equity

Private companies are usually out of reach for DIY investors, but can be accessed through trusts such as this. It buys other funds, offering a slice of thousands of unlisted firms, so it is effectively a tracker fund for private businesses, which over the long term have tended to produce higher returns than their quoted counterparts. Investors should be prepared for volatility, however.

Charge: 2.33pc | Ticker: HVPE | Five-year return: 76.3pc

24. Biotech Growth

Biotechnology stocks have offered great returns and diversification in the past decade. Few funds picked as many winners as this one. The specialist portfolio is strictly for the adventurous, however, with holdings in small and unknown stocks that may shine in future.

Charge: 1.1pc | Ticker: BIOG | Five-year return: 19.9pc

25. Fidelity China Special Situations

Dale Nicholls, the manager, has a strong record in China, one of the world’s fastest growing economies.

Charge: 1.04pc | Ticker: FCSS | Five-year return: 25.2pc

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*Fund is available at a lower cost on Hargreaves Lansdown

What do you think of our selection? Have we missed out any of your favourite funds, or been too kind to some managers?

Let us know in the comments section below.


How do I choose funds for ISA? ›

How to Invest
  1. Choose a risk/return level you're comfortable with. Our risk explorer helps with this and includes fictional case studies for people. ...
  2. Choose a well diversified and low cost investment. Our ready made portfolios and comparison tables are created on this basis. ...
  3. Regularly keep an eye on your money.

Which ISA is the best to invest in? ›

1. A cash ISA may be better if you want a short-term option and don't want to risk losing any money. Whether a cash ISA or stocks & shares ISA is better for you depends on whether you're willing to risk your money investing and when you'll need access to the cash.

How many funds should I hold in my ISA? ›

It is not an exact science, but the number of holdings will depend on your experience and size of your portfolio. Stevenson says: 'For an experienced investor, with a large portfolio of more than £100,000, anywhere between 10 and 15 funds should be more than enough to provide adequate diversification.

What is the best return on an ISA? ›

You can choose the rate of growth yourself or use the placeholder 5% growth rate. This rate sits within the FCA's recommended range of 3.5% - 5.5% for stock returns after inflation. This ISA calculator assumes the rate of growth will stay the same each year but in reality, it will vary over time.

Is it worth putting money in an ISA? ›

Why save into an ISA? Money saved into an ISA will escape tax no matter how much you earn in interest. So even if the Savings Allowance means you currently escape tax on interest, if the Bank of England raises rates, or your earnings rise, it could see you become liable in the future.

Is ISA a good option? ›

Eliminates risks associated with rising interest rates

Investing in an ISA guarantees that any interest will remain tax-free no matter how high the interest rates rise. These are just some of the reasons why ISAs can be an attractive savings choice.

Who pays highest interest on ISA? ›

Fixed rate cash ISAs
  • Paragon. One Year Fixed Rate Cash ISA. Pays: 4.40% Min investment: £500. ...
  • Virgin Money. Two-Year Fixed Rate Cash E-ISA Issue 582. Pays: 4.40% ...
  • Virgin Money. Three Year Fixed Rate Cash E-ISA Issue 580. Pays: 4.41% ...
  • Principality Building Society. Five Year Fixed Rate Cash ISA Issue 286. Pays: 4.05%
May 22, 2023

Why is my ISA losing money? ›

While you are taking on a degree of risk with investing, money is a cash ISA will be losing money over the long-term if the interest rate on the account doesn't keep up with the rate of inflation.

Is ISA better than Stocks? ›

Cash ISA vs Stocks and Shares ISA returns: long v short-term

Cash ISAs tend to be more suitable for short-term saving while Stocks and Shares are more suited to long-term investment. Therefore, it is a good idea to think about what you are saving for first if you are choosing between them.

How long should you hold an ISA? ›

Stocks and shares ISAs are a suitable alternative if you're looking to invest for between 5 to 10 years, or longer. They allow you to hold investments without paying Capital Gains Tax on any potential profits.

How long should I leave money in an ISA? ›

The general consensus is that it's a long-term game – you should put money away for a minimum of five years to smooth out any ups and downs. You'll also usually have to pay a few different fees associated with stocks & shares ISAs, including: Platform charge.

How long can you keep money in an ISA? ›

Your ISAs will not close when the tax year finishes. You'll keep your savings on a tax-free basis for as long as you keep the money in your ISA accounts.

What are the different ISA options? ›

There are 4 types of ISA : cash ISAs. stocks and shares ISAs. innovative finance ISAs.

Can I choose the stocks in my ISA? ›

Can I pick my own stocks in an ISA? Yes, if you opt for a self-select ISA you can choose which investment funds, unit trusts and stocks and shares you invest in.

How do I choose where to invest my money? ›

Before you make any decision, consider these areas of importance:
  1. Draw a personal financial roadmap. ...
  2. Evaluate your comfort zone in taking on risk. ...
  3. Consider an appropriate mix of investments. ...
  4. Be careful if investing heavily in shares of employer's stock or any individual stock. ...
  5. Create and maintain an emergency fund.

How many different funds should I invest in? ›

You should therefore only keep as many funds in your portfolio as you're comfortable monitoring. For example, if you hold 10 or 20 different funds, you'll need to keep a close eye on the changing value of all these investments to make sure your asset allocation still matches your investment goals.


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3. 5 Best Fidelity Index Funds To Buy and Hold Forever
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4. Should You Take Your Tax Free 25% Pension Lump Sum at 55?
(Justin King, Chartered Financial Planner)
5. Financial Expert Suze Orman Talks Women And Money, Arguing With Master P + More
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6. Why I stopped buying Vanguard’s LifeStrategy funds.
(Damien Talks Money)


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