Now we’re into April, the Stocks and Shares ISA deadline is upon us. This is when my allocation resets, meaning I can invest up to £20,000 over the next 12 months into this tax wrapper. Any shares bought within it don’t incur capital gains tax when sold. With this in mind, which are the best shares to buy for my ISA this year?
First up is St James’s Place (LSE:STJ). One element to making it one of my best shares to buy now is the longevity I think it offers me as an investor. When buying a stock for my ISA, I’m wanting to hold it for years to come.
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St James’s Place is a large UK wealth manager. I think the business model is sustainable, as is the revenue streams. The company makes money from fees charged for investment advice, along with commissions from funds and other investment purchases by clients.
The business is clearly doing well at the moment, with gross inflows of £14.3bn in 2020. The company now holds a record of assets under management on behalf of clients, at £123.9bn. I think this momentum should continue into 2021, with the size of retail interest in stock markets.
The potential risk here is the longer-term impact of Covid-19. Financial advisers utilize face-to-face meetings to build relationships with clients. Without physical marketing events, client entertainment and other in-person events, the company may find a negative impact on revenue.
Another one of my best shares to buy now
Another firm I’d rank as one of my best shares to buy now is Auto Trader Group (LSE:AUTO). The reason I think it’s something to look at right away is the share price is down 7.5% this year (but up 25% over 12 months).
The slump can be attributed to the fact that car dealerships have been closed since December, and are reopening on 12 April. Given the marketplace that Auto Trader provides for car buyers and sellers, having sellers limited in their ability to trade doesn’t help.
In a similar way to the property market, I think we could see a lot of pent-up demand come this summer. It’ll be a time when consumers will actually be more active in using their vehicles, or indeed trading them in. Investors may spot this, potentially making Auto Trader the best vehicle-related share to buy for such a move.
Alongside this, Auto Trader has launched a new initiative of a guaranteed part-exchange service. The beta trial of 1,000 dealers was successful, and so will be rolled out shortly. I think this could help to push up car sales on the website, and is another string to the services offered.
One risk is the negative financial impact Covid-19 has had on many people. With uncertainty for 2021, will the pent-up demand fizzle out as consumers decide to simply make do and save the cash? Personally I think not, but I could be wrong here.