Where is the ISA money going?
With ISA season in full swing, it is interesting to see where investors are putting their money at the moment. The latest ISA season update from Fidelity, a fund supermarket platform, contains some surprising results.
The most popular ISA fund in February was the Fidelity FundsNetwork ISA Cash Park.
This suggests that investors are keen to make use of their ISA allowance for 2009/10, but unsure of where they should be investing the money. We suspect that many investors are waiting for the outcome of the General Election in May before making their investment decisions.
The second most popular fund in February was Invesco Perpetual High Income fund, managed by Neil Woodford.
This remains a very popular fund for retail investors, although does not currently appear on our own preferred fund lists for this sector. We feel uncomfortable recommending such a large investment fund due to the difficulties the manager will inevitably face taking even a small position in a single company.
The top selling sector in February was UK All Companies, followed by Cautious Managed and UK Corporate Bond. These three sectors accounted for over 30% of ISA investments made in February.
The report also confirms what we already knew about how busy this ISA season is compared to last year.
Their ISA applications are up 46% compared to 2009 and they have had a 40% increase in call volumes. This time last year, the stock market was at an early stage of a rally that few expected to materialise.
With Easter weekend falling this year at the end of the tax year, it is important to make any ISA investments you would like to make with plenty of time to spare, to avoid missing out on the ISA deadline.