A growing number of ISA investors are planning to invest their allowance in emerging markets this year, research from Interactive Investor has indicated.
With ISA season well under way, the online stockbroker has revealed that 40 per cent of investors have plans to invest in established emerging markets in the forthcoming year – representing a marked increase on last year's figures when 22 per cent of investors showed an appetite for this sector.
In addition, an increasing number of investors – 15 per cent compared 10 per cent last year – intend to expose their capital to more risk by investing in newly established emerging markets.
Commenting, Rebecca O'Keefe, head of investment at Interactive Investor says there has been "strong flows of money" into emerging market funds.
"This tells us that investors believe these economies will offer the best prospects for growth in the medium and longer term, and reflects the strong gains made in these markets over the past 12 months. Private investors are willing to take additional risk for the potential reward," she said.
For investors who are comfortable with taking a high amount of risk with their capital, Interactive Investor suggests that the Aberdeen Emerging Markets Fund might be a suitable choice, while investors who are looking for medium to high risk UK based investments should consider the UK Equity Income option, which includes Schroder Income and BlackRock UK Income funds.
Currently, investors can save up to £7,200 in an ISA, while over 50s can invest up to £10,200, although this limit will apply to all investors from the beginning of the 2010/11 tax year.
Encouraging investors to secure their ISA allowance before the April 5th deadline, Ms O'Keefe added: "Investors don't have to choose their investments before the April 5 tax deadline. They can simply secure their allowance and choose their investments later."
© Fair Investment Company Ltd
