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3 UK shares I’d buy in a Stocks and Shares ISA for a volatile 2021

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2020 has been a challenging year, to put it mildly. The tragic Covid-19 pandemic and its severe economic consequences have made it the most difficult year for generations. It’s hoped 2021 will be better in many respects. But UK share investors could be facing volatile conditions for some time yet.

Better news this week suggested that a Covid-19 vaccine could be heading our way. However, it could be many months before a ‘silver bullet’ for the pandemic is rolled out. In the meantime, the second coronavirus wave is worsening and widespread lockdowns are being reinstated.

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It’s clear that UK share investors need to prepare for a prolonged and painful economic downturn. It doesn’t mean, though, that they need to stop investing in British stocks altogether. There are still stacks of quality UK shares that are likely to deliver meaty shareholder returns whatever happens to the global economy.

3 UK shares on my ISA watchlist

Here are three quality UK shares I’d buy for my Stocks and Shares ISA for 2021:

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1) CMC Markets

CMC Markets is a perfect pick for what could prove to be another volatile year in financial markets. Trading volumes have been electrifying at the business in 2020. On top of this, business at the FTSE 250 firm could benefit from other issues like a bumpy Brexit process and ongoing trade tariff tiffs.

The UK firm — which allows users to get involved with contracts for difference (CFDs), spread betting and foreign currency trading — said last week that pre-tax profits rocketed 369% in the six months to September. And it’s investing heavily in technology and staff to keep earnings ripping higher too.

2) Homeserve

Tough economic conditions next year shouldn’t matter too much to emergency callout specialists Homeserve. Trading numbers last week showed the FTSE 100 company enjoyed a 17% rise in adjusted operating profit in the six months to September.

The essential nature of its services, whether that be fixing leaks or getting the central heating back on, means Homeserve doesn’t have to worry much about economic turbulence. But I don’t think this makes the UK share a great buy just for 2021. The huge amounts Homeserve is spending on acquisitions will pave the way for meaty earnings growth for years to come.

3) Fresnillo

I believe investing in Fresnillo is a great way to hedge my bets for 2021. Continued bumpiness in the fight against Covid-19 and a patchy economic recovery will mean that demand for its silver from the investment community will remain red hot. Prices for silver hit seven-year highs of $29 per ounce a few months back.

However, the FTSE 100 firm could also benefit from an improvement in economic conditions. Silver’s a dual-role metal and demand for it also rises when industrial activity improves. It is used for a variety of purposes, from a critical ingredient in electronics to the manufacture of jewellery. This also makes Fresnillo a top buy for the economic recovery.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo and Homeserve. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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