Investors Overwhelmingly Drawn to IFISAs and Higher Interest Rates
Almost half of Assetz Capital investors are planning to put the majority of their ISA investment in Innovative Finance ISAs (IFISA) this ISA season, according to the peer-to-peer business lender’s Q1 Investor Barometer.
Just 8% confirmed they would be investing in Cash ISAs, with a quarter planning to opt for Stocks and Shares ISAs.
Assetz Capital canvasses the views of its 33,000-strong investor community on the most pressing issues in finance, government and the economy every quarter.
Carried out in February 2019, the Q1 Investor Barometer also revealed that 53% of investors identify high interest rates as the main reason for selecting their ISA of choice, with the stability of rates over time and the security of funds listed as the deciding factor for 17% and 18% of investors respectively.
Stuart Law, CEO at Assetz Capital said: “When surveyed in August last year, IFISAs made up 37% of the average Assetz Capital investor’s ISA portfolio, with Stocks and Shares slightly ahead at 44%. Just six months later, the results suggest that a significant portion of our investors are planning to jump ship to the IFISA.
“It’s little surprise that our experienced investors who understand the risks are increasingly opting for the attractive headline rates of return offered by IFISAs. However, with many traditional ISAs causing some investors to lose money on their investments in real terms by failing to beat the inflation rate, we expect this trend to increase among the wider public as more and more people become aware of the benefits of the ‘third way’ offered by the IFISA.
“It is clear that there is still some appetite for stocks and share ISAs, but the dull return of the Cash ISAs means it may only be a matter of time before they are no longer a part of our investors’ portfolios.”
Assetz Capital’s IFISA can be wrapped around any of the business’s investment accounts, enabling users to invest in secured P2P loans while benefiting from tax-free target interest rates starting at 4.1% p.a. Capital is at risk.
(Source: Assetz Capital Investor Barometer)