How To Find Top-Rated Investments for Your ISA

Morningstar's tools and research can help you find a top-rated fund for your ISA portfolio

Holly Cook 13 March, 2013 | 7:00AM
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If you've been following our Investing with ISAs Week and you want to start taking advantage of tax-free investing, we've got several tools that can help you do your homework.

Researching Stocks

Morningstar's Equity Research can help you find valuable long-term stocks and identify when these options are under- or over-valued. Search for a company in the Search Box at the top of the screen and select the company you're looking for from the dropdown list. You'll find Morningstar analysts' research on the stock under the 'Stock Research' tab if it's one of the 1,000+ companies that we cover.

The Star Rating for Stocks denotes whether a stock is currently being undervalued or overvalued by the market compared to our analyst's fair value estimate; 5 stars suggests it's currently cheap compared to our valuation, while 1 star suggest it's over-priced.

Beyond stocks, many open-ended and closed-end funds offer monthly savings plans that allow you to drip-feed your assets into the investment at regular, convenient intervals.

Researching OEICs and Unit Trusts

If you know which areas you wish to invest in, you can use our Fund Screener to screen the fund universe for funds that suit your portfolio needs—each Fund Report will tell you whether it is ‘ISA-able’ under its Fees tab. Morningstar's ISA-eligible Fund Quickrank tool allows you to rank over 4,000 OEICs available for purchase within an ISA. You can search by various criteria, including past performance, total expense ratio and initial minimum fee.

Both these tools will show you at a glance which of your search results have been rated by Morningstar fund analysts. In addition to the Morningstar star rating, a quantitative measure, our analysts also research funds on qualitative measures. To easily find which ISA-eligible funds have achieved Morningstar's highest Analyst Rating, Gold, simply click on the ISA Fund Quickrank's 'Morningstar Analyst Rating' column to rank the results in order.

Researching Investment Trusts and ETFs

Don't forget that open-ended funds and unit trusts aren't the only investment vehicles suited to an ISA wrapper. You might also want to consider an ISA-wrapped closed-end fund or investment trust, in which case use our Investment Trust Screener to find funds that fit your investment criteria. You can easily check that each fund is ISA-eligible in the fees section of its fund report--see BlackRock Greater Europe Investment Trust (BRGE) as an example (and read our analyst's view of the fund here)--as well as finding more information on its management fees and total expense ratio.

It's a similar story for ETFs--our ETF Quickrank and ETF Screener tools can help you find suitable low-cost, index trackers for your ISA.

Managing Your ISA Portfolio

Finally, one of our most powerful tools is Portfolio Manager. This allows you to create and track your portfolio, while monitoring whether any of your underlying holdings have stock overlap or whether you are heavily invested in one particular asset, region or investment style. This can be particularly useful if you're running a pension and a separate ISA.

Are you as diversified as you think? Using our Instant X-Ray tool will give you an instant illustration of the basic characteristics of your portfolio, specifically its asset allocation, and show you at a glance how buying or selling a particular investment might change the portfolio’s overall exposure to different investment styles. (X-Ray is available to Premium members.)

Portfolio Manager, our Quickranks and our Screener tools are all free to use--you need to register with (it's free) to save your portfolio so that you can revisit it at your convenience and create portoflio e-mail alerts. Morningstar Research on stocks and funds, as well as our X-Ray tool, are Premium features. Learn more and take a free 14-day trial here.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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About Author

Holly Cook

Holly Cook  is Manager, Morningstar EMEA Websites

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