In the run-up to the end of the tax year and the deadline for using ISA allowances, AJ Bell has shared the top ten stocks held by its ISA millionaire accounts.
High dividend-paying FTSE 100 stocks with consistent business models are favoured by these account holders, who have an average age of 72.
AJ Bell highlighted the propensity of ISA millionaires to invest in stocks instead of funds. Investing in stocks as opposed to funds helps reduce fees and provides a more concentrated portfolio of higher conviction holdings, which can lead to market outperformance.
“AJ Bell ISA millionaires have shown a preference for investing in individual shares rather than funds, with 75% of their portfolios sitting in stocks (including investment trusts),” says Dan Coatsworth, investment analyst at AJ Bell.
There aren’t any real surprises in the top ten stocks held by AJ Bell’s ISA millionaires. All the top ten stocks are constituents of the FTSE 100, and all pay dividends. Notably, ISA millionaires are more than content to follow the mantra of ‘never sell Shell’ with 39% of accounts holding the oil major.
“Big blue-chip names like Shell, Lloyds and GSK are the most popular stocks with AJ Bell customers who are an ISA millionaire. US-listed tech giants including Nvidia, Microsoft and Apple also feature in portfolios but far more have large cap dividend-paying stocks from the UK market than overseas-listed stocks which pay little or no income to shareholders,” Dan Coatsworth said.
| % of ISA millionaire holders | |
| SHELL | 39% |
| LLOYDS BANKING GROUP | 32% |
| GSK | 32% |
| BP | 31% |
| AVIVA | 28% |
| NATIONAL GRID | 25% |
| HALEON | 25% |
| SCOTTISH MORTGAGE INVESTMENT TRUST | 24% |
| LEGAL & GENERAL | 24% |
| HSBC | 23% |
Another AJ Bell observation investors may do well to consider is the approach ISA millionaires take to managing portfolios. Retail investors can often be guilty of overtrading, and this is something those achieving the £1 million mark seem to avoid.
“There also appears to be a buy and hold mentality given the number of spin-offs in the ISA millionaire portfolios. Shares in Haleon, Woodside Energy and Jackson Financial were distributed free of charge to shareholders of GSK, BHP and Prudential respectively as the parent companies restructured and demerged holdings. These gifted stocks look as if they’ve been left alone in investors’ portfolios rather than the usual temptation of cashing out of a demerged business,” Coatsworth explained.
Tips AJ Bell provided to achieving the ISA millionaire status include starting early, maximising your contributions and spreading your risk.
