Types of Stocks and Shares ISA

Individual Savings Accounts, or ISAs, are a government-instigated scheme intended to encourage UK citizens to make savings and investments. At present, you can put up to £10,200 into ISAs in any given tax year, although if you want to make the most of this allowance, you have to invest at least half of this figure into Stocks and Shares ISAs. There are plenty of different types of Stocks and SharesISA available from companies such as Legal & General. Here, we shall discuss a few different types of Stocks and Shares ISA, in order to help you to make the right investment choices.

Actively managed ISAs are an investment in a stock market portfolio selected and managed by a professional fund manager. The fund manager will buy and sell shares in the portfolio in an attempt to increase the value of the fund. This type of ISA is usually the most profitable, but it is also the riskiest. Also, you will have to pay higher management fees with this type of account. Therefore, it is important to do a fair bit of research into the stock market before you invest in this type of fund, and it is unwise to assume that a fund will continue to be a good performer based solely on past performance.

Ethical ISAs are a type of managed fund that only invests in firms that conform to strict environmental and ethical guidelines. This means that you can use your investing power to actively promote green technologies and sound ethical practices in business. These funds have performed very well in recent years due to increased consumer awareness and the global drive to replace fossil fuels with sustainable alternatives, and this trend is expected to continue over the next few years.

A Multi Manager ISA enables you to spread the investment risk across several different funds with one simple investment. It is effectively an investment in a managed fund that invests in a number of other funds rather than making direct investments in stocks and shares. The performance of these funds is monitored by a professional fund manager, who selects the funds and makes changes to the portfolio based on the current and predicted performance of each fund. A Multi Manager ISA may contain any type of fund from a wide variety of different investment companies.

Disclaimer:
"This article provides information of a general nature only. It may no longer be current. It does not provide legal advice nor should it be relied upon. If you have specific legal questions you should consult a lawyer."