ISA millionaires are an elite group of investors. Across the various UK investment platforms (Hargreaves Lansdown, AJ Bell, Youinvest, Interactive Investor, etc) there are only a few thousand of them currently.
Here, I’m going to highlight the three most owned shares among Hargreaves Lansdown’s ISA millionaires. Should investors follow these wealthy individuals and buy these shares today?
ISA millionaire stocks
According to a recent report, those three are:
- Shell – one of the world’s largest oil companies.
- GSK – the global healthcare company with a focus on medicines and vaccines.
- Lloyds Banking Group – one of the UK’s largest banks.
Mature companies
Now looking at these companies, they have a few things in common.
For starters, they’re all mature FTSE 100 companies rather than start-ups, or high-growth businesses.
Secondly, they all have relatively low valuations. Both Shell and Lloyds look very cheap at present, with price-to-earnings (P/E) ratios of 6 and 6.2 respectively. GSK has a P/E ratio of about 9.8.
Third, they all have relatively high dividend yields. Currently, Lloyds has a yield of about 5.9%, while Shell and GSK have yields of 4.4% and 3.9% respectively.
Are these shares worth buying?
So should investors buy these shares for their own ISAs? Well, I do think they could play a role in a diversified portfolio.
With their low valuations and high yields, there’s a reasonable chance they’ll produce solid returns for investors in the years ahead.
Having said that, if I was aiming to become an ISA millionaire (and this is a goal of mine), these stocks wouldn’t be the cornerstone of my portfolio.
The ISA millionaires have different financial goals to most of us. These individuals have already made a ton of money from the stock market. So now they’re looking to protect it. Investing in blue-chip businesses paying dividends is a sensible strategy.
By contrast, I’m looking to grow my wealth to reach the goal of becoming an ISA millionaire.
The best way to do this? To my mind (and with the benefit of 20 years of experience), it’s by investing in companies with substantial growth potential.
Growth stocks for big gains
I’m not talking about investing in speculative penny shares here. Instead, I’m talking about high-quality growth stocks. Companies like Apple, Microsoft, Alphabet (Google), Mastercard, and Airbnb are some good examples.
These companies all have outstanding track records when it comes to generating investor wealth over the long run because they’ve generated strong growth over time. Yet looking ahead, they still appear to have plenty of growth potential.
So these are the kinds of companies I’m going to be building my investment portfolio around as I strive to achieve ISA millionaire status.
I think they’re likely to get me there faster, although there are no guarantees, of course.