ISA investors’ appetite for equities increases

As interest rates have remained historically low for a year, ISA investors reveal they remain disillusioned with returns on cash investments, and so continue to take a bullish approach to investing in equities.  According to research by Barclays Stockbrokers, the UK's largest execution-only online stockbroker, 84% of ISA investors have invested in equities in 09/10 tax year compared to two-thirds (66%) in the previous tax year.

The survey, conducted amongst Barclays Stockbrokers Investment ISA clients, also found three-quarters (75%) of over 50s have taken advantage of the higher ISA limit, or still intend to do so, and three-quarters (75%) of all investors plan to invest in an Investment ISA in the next tax year (2010/11).  Furthermore, despite the events of the past two years, more than half of investors (58%) are either unchanged in their risk appetite or see the volatility in financial markets as an investment opportunity.  Less than 3% say the events of the past two years have put them off investing.

Barbara-Ann King, Head of Investments, Barclays Stockbrokers, comments:  "As the Bank of England held the base rate at 0.5% for its twelfth consecutive month, our research shows that the low interest rate environment has encouraged most investors to change their investment outlook - less than a third (28%) say their views have not been affected.  It is also encouraging to see clients understand the value of a diversified portfolio; almost three-quarters of investors (72%) spread their ISA across various products and asset classes, fourth-fifths hold equities, a quarter invest in ETFs and ETCs and more than a third (34%) invest in funds in their Investment ISA."

Barbara-Ann King continued: "We expect that investors will take advantage of increased Investment ISA contributions for the next tax year when the new allowances become applicable to all. Significant sums of money can be invested tax-free, for example a married couple could invest £34,800 tax-efficiently over the next month, or £40,800 if they are both aged 50 or over.

"With Barclays Stockbrokers Investment Viewpoint offering topical analysis on markets which may provide opportunities that investors - whether cautious, moderate or opportunistic in their investment approach - have not previously considered, and commentary on topical events and their impact on the financial markets, Barclays Stockbrokers encourages investors to expand their investment horizons as well as offering the means to act on them.  Combined with Cotter's Corner - which provides in-depth commentary on how an experienced investor uses different products, strategies and tools to achieve investment objectives - and our Smart Investor magazine, we offer our clients the support that they need to make the most from their investing activity, and this is being recognised by the year-on-year increases that we have seen in our ISA subscriptions."