As the new tax year unfolds, investors are presented with a fresh opportunity to maximise their Individual Savings Accounts (ISAs). With a £20,000 allowance per individual, the focus is increasingly on funds that can offer both diversification and the potential for growth. Recognising the current economic landscape, five financial experts have shared their top fund picks for 2026, each aiming to balance risk and reward in a turbulent market.
Navigating Market Volatility
The stock market has seen significant fluctuations, causing some investors to hesitate when considering a foray into equities. However, experts suggest that, over the long term, investing through a stocks and shares ISA is likely to yield better returns than keeping money in cash savings. The average stocks and shares ISA value stands at over £65,000, dwarfing the typical cash ISA, which averages less than £13,500.
Dan Moczulski, Managing Director of eToro UK, explains, “With UK inflation hovering around 3 per cent, holding onto cash is less than ideal. In contrast, the average stocks and shares ISA has appreciated by approximately 11 per cent over the past year, while cash ISAs have only delivered an average return of 3.48 per cent.” This context sets the stage for the expert recommendations that follow.
Expert Fund Selections
Scottish Mortgage FTSE 100
Annabel Brodie-Smith, Communications Director at the Association of Investment Companies (AIC), has chosen the Scottish Mortgage FTSE 100 investment trust, managed by Baillie Gifford. This fund is notable for its global investments in both private entities such as SpaceX and Revolut, as well as publicly listed firms like Meta and Nvidia. With a focus on innovative companies across various sectors, the trust boasts a 5 per cent discount and a low expense ratio of 0.31 per cent. Over the past year, it has achieved a remarkable 27 per cent increase, and a staggering 68 per cent over the last five years.
iShares Over 15 Years Gilts Index Fund (UK)
Alan Miller, Chief Investment Officer at SCM Direct, recommends the iShares Over 15 Years Gilts Index Fund, which targets UK government bonds with a minimum maturity of 15 years. With £2.95 billion in net assets and a Morningstar Gold rating, this fund carries a mere 0.1 per cent annual fee with no performance charges. Miller notes, “The opportunity in UK government bonds is striking; a compounded yield of 4.95 per cent over ten years equates to a 62 per cent return before charges, all tax-free within an ISA envelope.” The fund’s modest performance over the last year has been due to low interest rates, but higher rates may lead to improved returns moving forward.
Man Income
Paul Agnell, Head of Investment Research at AJ Bell, highlights the Man Income fund, which focuses on undervalued UK companies with solid cash flow and asset valuations. The fund has enjoyed a robust start to 2026, climbing over 10 per cent in just two months and finishing 2025 up by 28 per cent. Its management team is adept at identifying stocks trading below replacement costs that also exhibit positive cash generation. With a charge of 0.9 per cent, Agnell believes this fund is well-positioned to capitalise on ongoing market opportunities.
Murray International
Philippa Maffioli from Blyth-Richmond Investment Managers recommends Murray International, which aims for global diversification while delivering a steady income stream with a yield of approximately 3.5 per cent. Maffioli appreciates the fund’s emphasis on reliable cash flows and reasonable valuations, steering clear of the temptation to chase high yields. The fund has surged by 36 per cent over the past year and by 60 per cent over five years, charging fees of just 0.5 per cent. This approach, especially if dividends are reinvested, can yield significant compounding returns over time.
Pantheon Infrastructure Plc
Lastly, Jonathan Moyes, Head of Investment Research at Wealth Club, suggests Pantheon Infrastructure Plc, which aims to diversify away from traditional stock markets while promising attractive long-term returns. This fund invests alongside top infrastructure managers in areas such as renewable energy and large-scale logistics. Moyes points out that shares in Pantheon Infrastructure are currently trading at a 13 per cent discount to net asset value, presenting potential for gains if this discrepancy narrows. However, he cautions that this investment comes with higher risks and should be part of a well-rounded portfolio. The fund has risen by 30 per cent over the past year but lacks a five-year performance history due to its relative novelty.
Why it Matters
As investors navigate the complexities of the financial landscape in 2026, these expert fund selections offer valuable insights into potential growth opportunities within ISAs. With the right strategy, individuals can harness the advantages of tax-free investments while diversifying their portfolios in a market characterised by uncertainty. Understanding these options is crucial for making informed investment decisions that can lead to significant long-term financial benefits.
