Investment platform AJ Bell today lifts the lid on the ISA ‘Super Investors’ that have built up the biggest stocks and shares ISA portfolios, including those with £1 million or more.
The figures show that ISA Super Investors are disproportionately male – 73% of ISA millionaires are men, compared to 63% of all AJ Bell ISA holders.
With an average age of 74, they also tend to be older, reflecting the fact that most will have benefitted from investing over several decades and may have held investments in PEPs (Personal Equity Plan) before the introduction of ISAs in 1999. Nonetheless, the youngest ISA millionaire is just 35 years old.
The Super Investors tend to be much more likely to hold shares than the typical investor. The most popular holdings include the likes of Shell, BP and Lloyds, as well as investment trust Scottish Mortgage. The largest ISA investor account holds over £9 million in a range of different stocks.
Although ISA millionaires are more likely to hold shares than most investors, it is important to recognise this doesn’t mean holding shares is a guarantee of greater returns. Investing in individual shares, rather than funds, is likely to deliver more volatile returns and the possibility of both outsize gains or losses.
The number of holdings in a £1m+ ISA portfolio varies considerably, with some investors holding more than a hundred different stocks and funds, while some hold just one or two. The average ISA millionaire portfolio stands at 28 holdings.
Top 10 holdings among ISA millionaires
- SHELL
- LLOYDS BANKING GROUP
- BP
- SCOTTISH MORTGAGE INVESTMENT TRUST
- AVIVA
- GSK
- RIO TINTO
- HSBC
- DIAGEO
- NATIONAL GRID
Junior ISAs
The data also examines JISA customers with £100k+ accounts.
The youngest JISA holder with £100,000 or more to their name is just 5 years old, although most are in their teens and will have benefitted from contributions made to their account since birth.
The JISA Super Investors tend to hold fewer investments, with parents typically picking a handful of trusts and funds for their children, rather than shares. The most popular include F&C Investment Trust, Scottish Mortgage as well as FTSE 100 and S&P 500 trackers.
Lifetime ISAs
LISAs are one of the most recent iterations of the ISA account, with the government introducing them from April 2017.
As a result, investors have had less time to build sizeable accounts. Nonetheless, some have built accounts worth more than £50,000, putting them in touching distance of the average first-time buyer deposit.
The age of LISA investors with over £50,000 varies from those in their 20s to people in their mid-40s, with the average being 37. It likely reflects the fact that LISAs can be used by both first-time buyers, or those hoping to use the money in later life after the age of 60, but must be opened before the age of 40.
AJ Bell managing director Kevin Doran says: "ISA Super Investors are a fascinating group of customers who have accumulated significant amounts of money in their ISAs through a combination of skill, discipline, consistency and probably a little luck along the way.
“The fact that most are in their mid-70s illustrates a crucial lesson – investing is a long-term game and contributing consistently over decades is the most common route to building a super-size portfolio. Although it is possible to get there quicker, those investors with sizeable accounts in their 30s are very much the exception rather than the norm.
“While it is intriguing to delve into the habits of the most successful investors, it is important to recognise that copying them isn’t an instant recipe for success.
“In order to reach a balance of £1m or more, in most cases you will need to have invested in shares. But this absolutely does not mean that investing in shares will make you a millionaire. ISA millionaires may have been able to back the winners when picking stocks, but there will be other investors that have been less fortunate.”