Many investors will be looking to make the most of their annual ISA allowance as the end of the tax year nears in April.
Interest rates may have come down but there are concerns about inflation staying high or even rising again amid geopolitical concerns such as Middle East tensions, the Ukraine conflict and Trump tariffs.
That can make it hard to decide where to put your money if you have spare cash to spend on ISAs and SIPPs. But as most investors know, market volatility is normal and investments can pay dividends over the long term.
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According to fund supermarket AJ Bell, investors are going global and favouring US market exposure, cash alternatives and income, with passive index funds favoured over active.
This is, perhaps, unsurprising as many active managers have struggled to outperform the strong US market amid the rise of the Magnificent 7 pushing up the S&P 500.
So where are investors putting their investments? We look at the most popular funds, investment trusts and shares that AJ Bell ISA customers put their cash into so far during 2025.
Most popular ISA funds
There wasn’t a single actively managed portfolio of stocks and shares on the list of most popular ISA investments so far this year, among AJ Bell investors.
Users have instead opted for low-cost tracker funds or exchange traded vehicles.
It comes as research by AJ Bell recently found just 31% of actively managed funds have beaten a passive alternative over the past 10 years.
Dan Coatsworth, investment analyst at AJ Bell, said: “UK investors are increasingly losing faith in the ability for fund managers to consistently outperform the market. By shunning active funds, investors are choosing the lower cost route of simply tracking the market. It’s easy to see why.
“The collapse of Woodford Asset Management in 2019, negatively affecting hundreds of thousands of people, together with a multi-year run of underperformance by so-called star fund managers Terry Smith and Nick Train, have given investors further reasons to be wary of active management. While there are still some bright managers delivering outperformance, it’s incredibly hard for them to succeed year in, year out.
“Outside of the equity space, there was only one actively managed fund in the top 10, being Royal London Short-Term Money Markets. With interest rates trending downwards on cash accounts, investors have been looking for cash alternatives that can be held in an investment ISA, and money markets funds have ballooned in popularity.”
Most popular funds among AJ Bell ISA customers so far in 2025 |
Fidelity Index World |
Vanguard S&P 500 ETF |
Royal London Short Term Money Markets |
HSBC FTSE All World Index |
iShares S&P 500 ETF |
iShares Physical Gold ETC |
Vanguard FTSE All World |
iShares Ultrashort Bond ETF |
Vanguard FTSE Global All Cap Index |
HSBC American Index Fund |
Source: AJ Bell. Data 1 Jan to 28 Feb 2025. Based on net flows. |
Most popular ISA investment trusts
Income has been the dominant theme among the most popular investment trusts with AJ Bell DIY investors so far this year.
The platform highlights that the average dividend yield on the top 10 most popular trusts is 6.7%, nearly twice the 3.4% yield offered by the FTSE 100.
Coatsworth added: “Share price weakness in many parts of the investment trust space, particularly infrastructure and renewable energy, have resulted in very high yields, including 10% from The Renewables Infrastructure Group.
“Investors may view such trusts as bargains given many trade on large discounts to the value of their underlying portfolio. Large yields offer compensation for the shares being out of favour but there is still uncertainty in when or if those discounts will start to narrow.”
Coatsworth said the minimal representation of growth-style investment trusts in the most popular list is a surprise and suggests a sense of caution among investors.
He added: “Scottish Mortgage used to be the ISA investor’s investment trust of choice, offering a way of accessing tomorrow’s market leaders. Not only is it absent from this year’s most popular trusts among AJ Bell DIY investors, but it also ranks as the least popular based on net flows. That suggests many people don’t want to hold out for jam tomorrow, and would prefer something that generates jam today, even if the returns might be less.”
Investment Trust | Yield |
City of London Investment Trust | 4.7% |
TwentyFour Select Monthly Income | 8.5% |
JPMorgan Global Growth & Income | 3.9% |
Law Debenture | 3.5% |
3i Group | 1.5% |
The Renewables Infrastructure Group | 10.0% |
Greencoat UK Wind | 9.1% |
Henderson Far East Income | 11.3% |
Abrdn European Logistics Income | 6.1% |
Supermarket Income REIT | 8.8% |
Source: AJ Bell. Yield details from AIC. Data 1 Jan to 28 Feb 2025. Based on net flows.
Most popular ISA stocks
The list of most popular stocks in AJ Bell ISAs so far this year is divided into three groups.
There are higher-risk investments linked to cryptocurrencies and AI such as MicroStrategy and Nvidia, generous dividend payers such as retirement savings group Phoenix and out of favour companies where investors are potentially buying in the hope of a rebound such as EasyJet.
Coatsworth said: “Nvidia is the only member of the Magnificent Seven to make the list of most popular ISA stocks. It delivered stellar share price gains in 2023 and 2024 and investors might be hoping for a continuation of this trend, although that has not happened so far this year.
“Donald Trump’s teasing and then confirmation of a strategic reserve of cryptocurrencies in the US got people fired up about Bitcoin. While investors cannot hold the crypto directly in an ISA, they can buy shares in MicroStrategy – now renamed as Strategy – and hold them in the tax wrapper. Strategy has become a proxy for the Bitcoin price due to its approximate $23 billion investment in the asset, equal to more than a third of the company’s entire market value.”
Coatsworth suggests that while investors view their self-invested personal pensions as a home for higher quality or more stodgy investments, they use their ISA for higher risk picks.
He added: “That might explain the presence of names such as EasyJet, JD Sports and Taylor Wimpey on the most popular ISA stocks list with AJ Bell customers, with their share prices either stuck in a rut or beaten up. Buying their shares now would require taking a view that something will happen to get them back on track – either a natural improvement in earnings, intervention by an activist investor or a takeover approach.”
Most popular stocks and shares among AJ Bell ISA customers so far in 2025 |
Nvidia |
MicroStrategy |
Glencore |
Phoenix |
Taylor Wimpey |
JD Sports |
John Wood |
Super Micro Computer |
SSE |
EasyJet |
Source: AJ Bell. Data 1 Jan to 28 Feb 2025. Based on net flows.
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