How to find which way the wind is blowing for the best Isa returns
It’s a frustrating time to be a saver. Inflation has reached its highest level in three decades, while banks have been very slow to pass on the three rises in interest rates since December.
As the deadline approaches for investing this year’s Isa allowance, how can you best protect your money from rising prices?
The answer is not in cash Isas, now typically paying less in interest than regular savings accounts. With consumer prices rising by 6.2%, the stock market might be the best chance of inflation-beating returns. But where to invest and how?
Some aim specifically to beat the rate of inflation. The Trojan Fund, from Troy Asset Management, comes recommended by Hargreaves Lansdown. It is based on four “pillars” of investment: large established companies it thinks can grow long term; government bonds; gold-related investments, and cash.
In the last year it is up 12%, with an 0.86% charge which Damien Fahy, of finance site Money to the Masses, says is “reasonable”.
Tracker funds, also known as index funds, track a broad market or a segment of a market. AJ Bell’s Laith Khalaf says they are a simple, low-cost option which can give instant diversification. He recommends the Fidelity Index World Fund, which has an annual charge of 0.12%.
“There is no special inflation strategy, you’re just investing in the whole market and relying on rising share prices to lift your returns above inflation in the long term,” he says. “One risk of this approach is that currently around two thirds of the global stock market is made up of US companies, so you’ll have a lot of eggs in one regional basket.”
It is up 14.9% in the last year.
The commitment to slow climate change, and a shift to more sustainable energy systems, has created possibilities,
Read more on theguardian.com
