What are Isa investors buying now?

Darren Hepworth, Trading and Customer Services Director of TD Waterhouse looks at what customers are putting into their ISA now.

With the end of the financial year fast approaching, investors are making careful decisions to make the most of their money. TD Waterhouse customer data shows that gold and emerging market funds are popular among Individual Savings Account (Isa) and Self-Invested Personal Pension (Sipp) customers, with Blackrock Gold & General and Aberdeen Emerging Markets being among the top fund choices.

Blackrock remains a top choice for a third year in a row amongst our Isa customers, as investors seek portfolio diversification in light of the continued eurozone sovereign debt crisis and concerns over possible future inflation. The popularity of the commodity in 2010 was certainly a peak, rising 29% to a December high of $1,426 per ounce at the end of 2010. Despite prices dropping off in the New Year, February has seen an upwards turn once again encouraging for those who have, or are looking, to invest.

Aberdeen Emerging Markets is the second-most popular fund holding among TD Waterhouse customers, as they continue to recognise the prospective long-term potential in these markets, which are rapidly gaining a reputation as being at the heart of global growth.

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With this in mind, investors may even be exposed to more opportunity moving into 2011 with recent geopolitical activity affecting the share price of global emerging market funds, possibly offering the chance of a bargain investment.

Asia has also proved popular amongst our Trading Isa holders with Gartmore China Opportunities being the sixth-most popular fund holding. This also concurs with the recent results of the 6th annual TD Waterhouse Investor Confidence Index, an independent survey to gauge retail investor confidence in the UK, which found that a quarter of UK investors surveyed expected the Asian stock market to perform best and a further 20% thought gold and precious metals would be top performers in 2011.

Looking to other Asian investment, First State Indian Subcontinent is the seventh-most popular Isa fund holding for TD Waterhouse customers. The fund is headed up by managers David Gait and Sashi Reddy who have been cautious in the short term during a time where Indian markets have suffered from pressure due to recent corruption scandals in the country. This prudent approach may just be why the fund has attracted investors to a new market.