IFISA established in investors’ ISA portfolio

By Bridging Loan Directory 5th November 2018

Innovative Finance ISAs (IFISAs) make up 37% of the average Assetz Capital investor’s ISA portfolio, according to the company’s Q3 Investor Barometer.

Stocks and Shares ISAs lead the way with a 44% share, but Cash ISAs are lagging behind – making up just 17% of the average ISA portfolio. The less mainstream Help to Buy and Lifetime ISAs are used very sparingly (1%).

The peer-to-peer business lender carries out its Investor Barometer every quarter, a survey of its 29,000-strong investor community.

The findings follow Q2’s results which showed that investors using Cash ISAs had dropped from 52% in Q1 to 37% in Q2, following the close of the traditional ‘ISA season’.

Stuart Law, pictured, CEO at Assetz Capital said:

“The IFISA has established itself as the option of choice for those who want fair target returns but without the volatility of the stock market. The Cash ISA, on the other hand, continues to fall out of favour.

“I’d expect much of the 17% share in Cash ISAs to be made up of historical investments that are at risk of being transferred. We’ve seen over £20 million of completed or in-progress transfers thus far and that figure will no doubt rise in the months to come.

“Investors in our platform are typically sophisticated and experienced – and understandably more likely to opt for IFISAs and Stocks and Shares ISAs – but our analysis points to a wider problem with the current Cash ISA market. There’s very little value to be had, so investors are voting with their feet.”

Earlier this year, Assetz Capital announced that £50 million had been invested into its IFISA since its launch in December 2017. ISA investments now account for over 15% of all loans funded through the platform.