Top ISA Funds and Trusts for All Investor Types
As the 2025/26 tax year draws to a close on April 5, investors should seize the opportunity to fully utilize their existing £20,000 ISA allowance and begin planning for the fresh allowance that becomes available starting April 6.
Stocks and shares ISAs offer a tax-efficient environment where investments can expand without incurring taxes on capital gains, which can accumulate to substantial amounts over time. For instance, individuals who consistently invested the maximum ISA allowance annually into the FTSE All-Share Index since the inception of ISAs in April 1999 would see their portfolio valued at £665,696 by April 2025, based on data from Interactive Investor, after contributing a total of £326,560 over those 26 years.
Selecting appropriate investments for a stocks and shares ISA portfolio is crucial. It requires aligning choices with one’s risk tolerance, the composition of existing holdings, and the individual’s stage of investment expertise.
Reliable returns
Investors using stocks and shares ISAs who prioritize dependable returns may find global equity income funds particularly appealing. These funds target dividend-paying companies worldwide, offering the prospect of an increasing income flow combined with potential long-term capital appreciation.
Such global equity income funds typically favor financially strong, efficiently managed enterprises, making them ideal for those who prefer consistent earnings while maintaining broad international market exposure.
Dzmitry Lipski, the head of funds research at Interactive Investor, recommends the Fidelity Global Dividend fund. Managed by Dan Roberts since its inception in 2012, the fund benefits from Roberts’ over 20 years of dividend-investing expertise.
Lipski explains that the fund targets global companies providing a solid dividend yield alongside opportunities for capital appreciation, with a goal to deliver approximately 25% more income compared to its benchmark index.
The portfolio comprises about 46 large, resilient firms, with roughly 48% allocated to Europe, 26% to North America, and 15% to the UK, while avoiding any exposure to China. According to Lipski, the sector distribution is intentionally conservative, emphasizing financials, industrials, and consumer staples.
As an alternative, Jemma Slingo, pensions and investment specialist at Fidelity International, endorses the Pyrford Global Total Return fund. This fund allocates about two-thirds of its assets to high-quality bonds and the remaining third to equities.
Slingo notes that it aims to minimize volatility while delivering consistent returns that outpace inflation. Although the fund’s performance chart shows limited severe declines, she acknowledges that growth has been relatively subdued, especially after adjusting for inflation.
Over the past decade, an initial £1,000 investment in Pyrford would have grown to £1,440. For those seeking a low-stress, ‘sleep easy’ investment, this balance might be a worthwhile compromise.
Adventurous diversification
Given the growing concentration in global stock markets and rising concerns over an potentially overheated AI investment theme, investors aiming to add intriguing diversification to their stocks and shares ISA might consider the Murray International investment trust.
Kyle Caldwell, funds and investment education editor at Interactive Investor, appreciates this trust for its effective use of a global mandate, featuring substantial allocations to Asia Pacific and Latin America regions.
Caldwell highlights that the trust’s portfolio diverges notably from broader market trends, employs a value-oriented investment approach, and provides a dividend yield exceeding the average at around 4%.
Fidelity’s Slingo shares worries about the market’s heavy reliance on a few dominant US technology stocks and favors exposure to Latin America and Asia through the Lazard Emerging Markets fund.
She describes how the fund identifies companies trading at discounts to the market yet possessing superior fundamental qualities. Emerging markets ranked among the top-performing equity categories last year, with a favorable outlook persisting.
Factors such as robust earnings expansion, a depreciating US dollar, and a shift away from US assets could further enhance performance this year, according to Slingo.
Newer investors
For those new to investing who desire options more engaging than a standard global tracker fund and who feel uneasy about volatile markets, the Fidelity Global Dividend fund stands out as a solid choice.
Slingo points out that it invests in worldwide companies, blends growth and income potential, and strives to maintain lower volatility than the overall market. Over the last 10 years, it has achieved consistent performance gains.
The fund includes familiar companies such as Unilever and National Grid, helping novice investors recognize that they are acquiring stakes in tangible businesses that affect daily life.
Alternatively, Lipski from Interactive Investor proposes a managed portfolio solution like Interactive Investor’s Managed ISA, which simplifies the process by selecting investments on behalf of the user.
Participants complete a questionnaire to match with one of 10 portfolios, available in two styles—index-focused or sustainable—and across five risk levels. The selected portfolio undergoes regular rebalancing to align with the chosen risk profile.
Fees remain competitive, with no additional management charges, as it integrates into Interactive Investor’s flat-fee subscription structure.
Less seasoned investors might also explore absolute return or capital preservation funds, which employ diverse strategies to curb volatility and shield against major market drops.
Lipski recommends the Trojan Fund, co-managed by Sebastian Lyon and Charlotte Yonge. It adopts a cautious, methodical strategy centered on capital protection and achieving real returns over the long term.
Lyon diversifies across various asset classes. The equity holdings concentrate on large, financially sound companies in mature markets, especially the UK and US. Defensive positions include premium sovereign and inflation-linked bonds, plus a deliberate stake in gold. Cash holdings serve to safeguard capital and enable quick deployment into promising opportunities.
Lipski describes it as a reliable, protective choice for those pursuing enduring real returns with managed risk exposure.
Experienced investors
Seasoned investors might seek to incorporate smaller company stocks into their stocks and shares ISA. Slingo from Fidelity cautions that these carry notably higher risks compared to large-cap stocks, yet they suit experienced individuals with extended investment horizons.
She suggests the Brown Advisory US Smaller Companies fund, which leverages a large research team to pinpoint the most promising US-listed smaller firms. The approach relies on thorough fundamental analysis and a patient, long-term perspective to drive superior results.
As a higher-risk selection, the fund has underperformed its benchmark recently. Nevertheless, Slingo believes it could attract veterans wary of over-reliance on massive US tech giants in their portfolios.
Dave Baxter, senior fund content specialist at Interactive Investor, further recommends the Marlborough Special Situations fund for advanced investors.
This fund capitalizes on the vibrant growth opportunities presented by the UK’s nimble and innovative smaller enterprises. Its sector allocations stand out, with significant emphases on industrials, consumer discretionary stocks, and technology. Key positions include Zegona Communications, Boku, and SCA Investments.
Baxter observes that the fund has struggled in 2025 and recent periods overall. With over 150 holdings and modest position sizes—the largest at just 2.6% of the portfolio—it maintains diversification.
Despite short-term challenges, its long-term track record is strong, bolstered by meaningful exposure to micro-cap, small-cap, and mid-cap segments. In theory, it stands to benefit as interest rates decline more substantially.
