I spotted an interesting article over at Citywire the other day, in which it listed the top 10 stocks and the top 10 funds owned by ISA millionaires, according to insight from Hargreaves Lansdown.
The online stockbroker has revealed that it currently has 168 ISA millionaires on its books and recently gave a breakdown of the most popular holdings among those with seven-figure ISA accounts. Here’s a look at what these high-net-worth individuals are invested in:
ISA millionaire stocks
The top 10 stocks owned by ISA millionaires, in alphabetical order:
Legal & General Group
Lloyds Banking Group
Royal Dutch Shell plc B Shares
ISA millionaire funds
The top 10 funds owned by ISA millionaires, in alphabetical order:
Fidelity Special Situations
Invesco Perpetual High Income
LF Woodford Equity Income
Lindsell Train Global Equity
Marlborough Multi Cap Income
Marlborough Special Situations
Marlborough UK Micro-Cap Growth
Stewart Investors Asia Pacific Leaders
One key takeaway here is that there is a strong focus on income.
Look at the prospective yields on offer from those stocks:
Aviva – 5.8%
BP – 6.1%
GlaxoSmithKline – 6.0%
Legal & General Group – 6.2%
Lloyds Banking Group – 6.0%
National Grid – 6%
Rio Tinto – 5.5%
Royal Dutch Shell B – 6.0%
Unilever – 3.6%
Vodafone Group – 6.6%
Every single one of those stocks pays a decent dividend at present, and most have pretty solid dividend tracks records.
Similarly, there’s a focus on income among the funds too, with at least four out of the ten funds having an income tilt.
Now, the stocks and funds listed above are simply current holdings. So we can’t draw too many conclusions about the long-term returns generated etc.
However, I think it’s safe to assume that reinvested dividends and the power of compounding over a long-term time horizon have helped ISA millionaires get to where they are today.
The lesson here is that investing doesn’t need to be complicated. A diversified portfolio of blue-chip stocks with dividends reinvested can generate powerful returns over the long term.
Disclosure: Edward Sheldon, CFA owns shares in Aviva, GlaxoSmithKline, Legal & General Group, Lloyds Banking Group, Unilever and Royal Dutch Shell.
This article is provided for general information only and is not intended to be investment advice. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.