The Motley Fool

What are the best UK shares to buy in an ISA now?

Image source: Getty Images.

The best UK shares to buy in an ISA now are likely to be different, depending on an investor’s aims. For example, an investor seeking a passive income is likely to prefer dividend shares. Meanwhile, an investor with a long time horizon should prioritise capital growth over an income.

However, there are likely to be common traits among the most attractive shares. For example, they may have low debt levels, a competitive advantage over peers and trade at a price that undervalues their long-term prospects.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Over time, such companies could have a positive impact on an ISA’s performance. They could lead to increasing financial freedom for investors.

Low debt levels among the best UK shares

The best UK shares could be those companies with solid balance sheets. After all, the economy is currently experiencing an extremely challenging period. Risks such as coronavirus are likely to remain in play in the coming months, and could have a negative impact on economic growth.

As such, companies such as Berkeley and Taylor Wimpey could be attractive purchases in an ISA. Both stocks have large amounts of cash on their balance sheet. This provides them with the financial strength to survive a period of potentially lower sales.

Significant sums of cash may also enable them to prioritise long-term opportunities that are not available to rivals, owing to their focus on surviving the short term. This may lead to higher profitability for Berkeley and Taylor Wimpey, as well as increasing share prices.

Competitive advantages compared to sector peers

The best UK shares for 2021 are also likely to have competitive advantages versus their peers. This may enable them to deliver higher levels of financial performance in the short run, since they may be less impacted by a weak operating outlook. They may also be in a stronger position to generate high returns in the long run, as they benefit from a likely global economic recovery.

Therefore, stocks such as Reckitt Benckiser and Diageo could be attractive investments for ISA investors. They have strong brands across a wide range of market segments. They also have strategies that could maximise their returns through greater innovation and efficiency.

Since the global economy is forecast to deliver an improving performance in 2021, buying globally-focused businesses may reduce risk and enhance returns.

A long-term outlook

Of course, even the best UK shares could experience a challenging period in 2021. Therefore, it’s crucial to take a long-term view of their prospects. Investors who are expecting similar returns in the short run to those experienced in the aftermath of the 2020 stock market crash may be disappointed. After all, major risks remain.

However, on a long-term view, the stock market could experience further growth that catalyses ISA portfolios.

A Top Share with Enormous Growth Potential

Savvy investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!).

Not only does this company enjoy a dominant market-leading position…

But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!

And here’s the really exciting part…

While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.

That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021.

Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge!

Peter Stephens owns shares of Berkeley Group Holdings, Diageo, Reckitt Benckiser, and Taylor Wimpey. The Motley Fool UK has recommended Diageo. 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.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.