Tax-efficient Individual Savings Accounts (ISAs) have saved investors and savers a boatload of cash down the years. Latest projections show that users of products like Cash ISAs and Stocks and Shares ISAs likely enjoyed a stunning £6.7bn of tax relief in the 2023-2024 tax year alone.
I own both a Cash ISA and Stocks and Shares ISA. I own a Lifetime ISA, too. But the majority of my money is tied up in my shares-based ISA, given the superior returns that equity investing tends to generate.
For investors building a portfolio from scratch, here’s a top share from the FTSE 100 to consider buying today.
A top trust
Investment trusts can be great stocks to buy when starting out on on investing journey. These financial vehicles invest in a portfolio of assets, which allows investors to diversify without having to purchase lots of stocks straight away.
Of the hundreds of trusts to choose from today, I’d consider parking cash in the F&C Investment Trust (LSE:FCIT). This is the oldest trust in the world, dating all the way back to 1868.
Its holdings span more than 400 companies across the globe and a range of sectors. Around two-thirds is in North American equities, and roughly another 19% and 6% in European and Japanese shares, respectively.
This focus on developed markets helps provide the trust with stability over the long term. However, with 8% of the trust invested in emerging markets, it also gives investors exposure to faster-growing economies.
Tech exposure
Another reason I think F&C Investment Trust is worth serious consideration is its high weighting of US technology stocks. The so-called Magnificent Seven shares (namely Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla) have significant long-term growth potential as global digitalisation grows.
On the downside, fresh developments with DeepSeek could work against the trust, given its substantial tech exposure. Chinese progress in artificial intelligence (AI) could pose various dangers, from reducing microchip demand to providing direct competition to US systems.
But on balance, the outlook for the US tech sector (and consequently F&C’s investment trust) remain extremely robust in my opinion. After all, these companies are market leaders across a variety of growth segments, from quantum computing and autonomous cars to cybersecurity and cloud computing.
Trading at a discount
Through a combination of share price gains and dividends, the F&C Investment Trust has delivered a healthy 10.1% average annual return since the beginning 2020.
To put that into context, the broader FTSE 100 has delivered a corresponding return of 7.3%. Past performance isn’t a guarantee of similar returns in the future. But I’m confident the trust will keep delivering better returns than the Footsie given its broad global composition and large weighting of growth stocks.
At £11.80 per share, the trust also currently trades at an 8% discount to its net asset value (NAV) per share. For new ISA investors looking to limit risk, I think it demands a very close look.
This post was originally published on Motley Fool
