Falling markets present Isa fund bargains

Published by on 16 February 2016.
Last updated on 16 February 2016

Falling markets

It is impossible to say for sure when a market has peaked or bottomed, but share valuations are more attractive now than they have been for some time.

Brian Dennehy, managing director of research website Fund Expert says: “With markets falling, this is possibly the best opportunity for many years to buy attractively priced Isa funds.”

Jason Hollands, managing director of Tilney Bestinvest says: “The art of successful investing is to buy when markets are weak and sell when they are high, not the other way round.

“Markets usually overshoot on the way up and on the way down, so while the rout could run for a while, for long term investors this is a much better entry point than we’ve seen for some time.”

Remember the end of tax year deadline for using your Isa allowance is only a deadline to put your cash inside the account, you don’t have to invest straight away. Mr Hollands says you could drip feed new money in, either through regular savings or by phasing in your cash over a period of weeks and months, rather than heroically piling in with a single lump sum.

Read why most investors would be better off following a regular monthly savings strategy

Moneywise Isa fund picks

Tracker funds are a good way to start investing because they are low cost and easy to understand.

The HSBC FTSE All Share Index fund aims to track the performance of the FTSE All Share Index, so the largest holdings will always be in the biggest companies listed on the London Stock Exchange and include the likes of HSBC, Royal Dutch Shell and BP.

The fund buys shares of each company in the index according to its relative weight in the index. It is very low cost with an annual charge of 0.07%.

If you want to concentrate your investments on medium and smaller companies, the HSBC FTSE 250 Index fund is a good option. It holds UK companies such as Rightmove and William Hill and has an annual charge of 0.18%.

Read about how sensible investing could have made you a million and why the FTSE 250 index fund might be your best option for the long term.

If you already have UK tracker funds then consider adding Tilney Bestinvest’s recommended funds Invesco Perpetual Global Targeted Returns, which aims to perform well in all market conditions or FundSmith Equity Fund, which invests in global brands.



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