I’m sure everyone has seen the online adverts and articles about someone who’s become a Stocks and Shares ISA millionaire. Usually they’re depicted as being older investors, denoting that it takes a long time to build a portfolio to this size.
That’s true, especially given the £20k annual allowance limit to put funds in an ISA. Yet here are some slightly more unusual stocks that could help accelerate growth.
The world of private equity
The first company I’m flagging up is 3i Group (LSE:III). Over the past year the share price has jumped 62%. It’s included in the FTSE 100 with a market-cap of £18bn, yet I don’t feel it gets that much interest from retail investors. This might be partly down to the fact the company is a private equity investor.
This means the firm uses capital to invest in projects and other businesses that aren’t listed on a stock exchange. The aim is to try and boost the growth of the firm and then exit the business via an IPO, or simply selling its holding.
The area of speciality for 3i is infrastructure projects. This includes the likes of Belfast City Airport and the East Surrey Pipeline.
I like the stock because it gives me access to opportunities I simply can’t get by investing in listed companies. However, private equity investments are often illiquid and difficult to value. Trying to pin an accurate value of a multi-year airport building project is almost impossible. This is a risk.
It’s certainly an unusual stock to consider buying as it isn’t a traditional manufacturing or services company. Yet the track record of share price growth means this could certainly help to accelerate the goal of becoming an ISA millionaire.
China’s still hot
The other stock in focus is the Fidelity China Special Situations (LSE:FCSS). This is an investment trust which means the business invests in other stocks. Over the past year, the share price has fallen 24%.
This is an unusual consideration because it’s quite niche in what the fund manager targets. Fidelity actively invests just in companies listed in China and Chinese companies listed elsewhere.
There are popular names we all know such as Alibaba and Tencent. These are in the top holdings for the trust, yet there are plenty of smaller firms I’ve never heard of.
China has been under pressure over the past year with slowing growth and a tentative reopening following the pandemic. Yet the large stimulus packages being talked about will really help to get things moving again, particularly in the property sector. As a result, I feel this is a great way to get exposure to this theme.
Given the focus of the trust, a risk is that it’s very concentrated on just China. Therefore, to reduce this risk I’d ensure it’s just one stock within a diversified Stocks and Shares ISA.
Ultimately, if China is to become the largest economy over the next decade, the growth potential from this fund could be very large.
