There’s no such thing as a stress-free stock. All UK share investors take a risk of losing some or all of their money when they use it to buy stock in a company.
Former FTSE 100 favourite Centrica is an excellent example. Utilities providers like the British Gas owner have historically been considered bulletproof stocks, due to the essential services they provide. But this one has lost a jaw-dropping 85% of its value over the past decade as promotion-led new suppliers have emerged to decimate its retail customer base.
That doesn’t mean I can’t take steps to greatly minimise the amount of risk I face as an investor though. Here are several low-risk UK shares I’d happily buy for my Stocks and Shares ISA. I think they’re in great shape to deliver strong shareholder returns over a prolonged period of time.
Changes to immigration rules could cause a severe problem for student accommodation provider GCP Student Living. Naturally, undergraduates coming from abroad to study at British universities are particularly dependent on the services provided by the likes of this UK share.
But, for the time being, government policy remains highly accommodative for overseas students to come over and study. Indeed, I think it’s a great stock to buy because university admissions could be about to hit new record levels. This illustrates the immense appeal of studying in Britain. And students having accommodation is an essential part of the process.
Greencoat Renewables is another UK share I’d buy to take the drama out of stock investing. As the name suggests, this business invests in assets which produce green power (in this case, wind farms in Ireland and Mainland Europe). This provides exceptional earnings visibility, given the stable nature of electricity demand.
In fact, I think Greencoat Renewables could thrive as the climate crisis turbocharges demand for low-carbon energy. It’s important to remember however, that profits can take a hit on a number of operational problems. These can include lost revenues when the wind doesn’t blow, and huge costs if turbines are damaged during extreme weather.
A top UK insurance share
Direct Line Insurance Group is one more non-cyclical share I’d happily buy for my Stocks and Shares ISA. Non-life insurance providers are classic safe havens as spending in this industry tends to remain stable regardless of the economy. And this is particularly the case for motor insurance providers, given that drivers need cover as a legal requirement.
Direct Line sources 70% of operating profits from car insurance customers, with the remainder sourced from other defensive areas like home, pet insurance and motor rescue services. Like all insurers, the company faces the risk of soaring claims in the event of major weather events or other catastrophic occurrences. But all things considered, I think this is one of the best stocks to buy to reduce investing stress.
Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. 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.