Taking a look at the most-bought stocks and shares investors are holding in ISA accounts is a great way to get some insight and inspiration.
To give you a better understanding of the investing world right now, I’m going to reveal the most popular investments for Freetrade ISA holders. I’ll also explain what you need to know about ISAs and how you can invest using one.
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Why is a stocks and shares ISA account useful?
A stocks and shares ISA is a type of savings account that you can use to invest and put your money to work. Currently, you can put up to £20,000 each tax year into one of these amazing accounts.
Why are they amazing? Well, any gains made on your investments held in a stocks and shares ISA are free from tax – for life!
The limit can change, so it’s always best to try and make the most of your allowance each year. That’s because any unused portion of your annual allowance doesn’t roll over to the next financial year. But, if you use this type of account to its full potential, you can build some serious tax-free wealth in a completely legal way.
Now that you’ve brushed up on your ISA knowledge, let’s take a look at the investments most popular with some ISA holders.
What were the 10 most-bought ISA stocks and shares last month?
According to the latest data from Freetrade, these were the stocks and shares that investors were stuffing into their ISA accounts in January:
| Rank | Investment |
| 1 | Tesla (TSLA) |
| 2 | Vanguard S&P 500 UCITS ETF Dist. (VUSA) |
| 3 | Vanguard S&P 500 UCITS ETF Acc. (VUAG) |
| 4 | Microsoft (MSFT) |
| 5 | Apple (AAPL) |
| 6 | AMC Entertainment (AMC) |
| 7 | Amazon.com (AMZN) |
| 8 | Vanguard FTSE All-World UCITS ETF Dist. (VWRL) |
| 9 | Alphabet (GOOGL) |
| 10 |
GameStop (GME) |
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Do these stocks and shares tell us anything interesting about ISA investors?
There’s a fairly diverse selection of investments. It’s encouraging to see one global equity fund (Vanguard FTSE ALL World) on the list, which is a solid broad index fund to invest in.
However, the majority of picks focus on US-based funds, tech stocks and (worryingly) meme stocks. Here’s a quick breakdown of each category.
US index funds
Stocks and shares in the US have had a turbulent time lately with high inflation figures and rising interest rates on the horizon.
The tech- and growth-heavy S&P 500 has been suffering as a result, and it looks like investors have been grabbing both the Vanguard S&P 500 (VUSA) and the Vanguard S&P 500 (VUAG).
These exchange-traded funds (ETFs) focus on tracking the same index. The difference is just that VUSA pays out any income (like dividends), whereas VUAG reinvests straight back into the fund.
Tech stocks
Because of the tax benefits, many ISA investors use this type of account for long-term investing and wealth building. So, the inclusion of the following stocks is because investors are confident of the bigger picture:
- Tesla (TSLA)
- Microsoft (MSFT)
- Apple (AAPL)
- Amazon.com (AMZN)
- Alphabet (GOOGL)
The investments above have seen a lot of volatility and price dips lately. But, ISA investors seem confident that they’ll recover and remain the global top dogs.
Meme stocks
It’s fairly surprising to see that meme stocks are still featuring strongly for UK investors. These stocks have had plenty of airtime over the last year, so the less said about these picks the better!
How can you invest in a stocks and shares ISA?
If you don’t already have an account set up, we’ve compiled and rated some of the top stocks and shares ISA accounts on the market.
It’s important to find an account that suits your investing strategy. Then, you can start researching and picking investments. Broad funds are a good place to start, but if you’d like to do some individual stock-picking, The Motley Fool’s Share Advisor service is great if you need a helping hand.
The end of the tax year is fast approaching, so you have until 5 April to make the most of your allowance! Just remember that all investing carries risk. So, invest wisely and don’t put more into the markets than you can afford to lose.
Please note that tax treatment depends on the individual circumstances of each individual and may be subject to future change. The content of this article is provided for information purposes only. It is not intended to be, nor does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
