The top ten stocks investors hold in their Isas – and how much tax-free investing could have saved them
The Magnificent Seven have not only captured investment headlines over the past year but also become a dominant force in British investors’ stocks and shares Isas.
And investors who shunned home bias and stuffed their Isas full of the US tech giants have reaped big rewards, as their share prices have soared.
Data from investment platform Trading 212 has revealed the so-called Magnificent Seven stocks, Nvidia, Apple, Microsoft, Tesla, Amazon, Alphabet and Meta bagged the top seven spots in the most held shares in its investors Isas.
The remaining spots were claimed by a high-flying UK turnaround star, engineer Rolls-Royce, another US giant that needs no introduction, Coca Cola, and finally, British oil major, BP.
Chipmaker Nvidia has become the world’s largest company and is the top held stock amongTrading 212’s stocks and shares Isa investors
Any investors lucky enough to have exceptional foresight and who backed the top ten Isa stocks long-term would have seen huge gains, with the average total return over five years across the ten standing at 518 per cent.
But that number is skewed by the colossal five-year total return figures for Nvidia, at 2,719 per cent, and Tesla, at 1,331 per cent.
Total returns on the other stocks range from minus 5 per cent for BP, to 251 per cent for Apple.
A huge profit on £10,000 invested – and an Isa would have saved a lot of tax
A £10,000 portfolio equally invested as £1,000 in each of the ten stocks five years ago would now be worth £61,180 – a £51,180 profit.
This bumper return highlights the importance of investing in a stocks and shares Isa, where profits are free from capital gains tax and dividends are tax-free too.
Outside of an Isa, cashing in a £51,180 profit could spell a big tax bill, with a higher rate taxpayer losing 24 per cent to capital gains tax above the £3,000 annual CGT-free allowance.
This means that while an Isa investor selling up entirely could keep all their gains on a profit that size, an investor outside of an Isa would pay £11,563 in tax.
An Isa wrapper protects savers and investors from tax on interest, profits and dividends and you can pay up to £20,000 each year into a stocks and shares or cash Isa, or a combination of both. Trading 212’s stocks and shares Isa offers fee-free dealing and has no account fee.
We reveal the top ten holdings of Trading 212 Isa investors and their returns over the five years to 13 November 2024 below.
Oil giant BP scrapes into the top ten for Trading 212 Isa investors but was the only stock in the list not to make money over the five-year period
The top five Isa holdings
Nvidia – up 2,719% over five years
Chipmaker Nvidia has become the world’s largest company as its shares soared into the stratosphere thanks to the AI boom.
Nvidia has been around since 1993 and originally specialised in high-powered chips for computer gaming, but it was then discovered that its graphics procession units (GPUs) were ideal for artificial intelligence computing. The company came to dominate the market as AI took off and investors have chased its shares higher, as revenues and profits rocketed.
Apple – up 251% over five years
Technology giant Apple is the world’s leading consumer electronics brand, thanks to its iPhones, iPads, iMacs, MacBooks and Apple Watches.
Apple’s coveted devices have strong pricing power and while doubts are periodically expressed over its ability to keep bringing groundbreaking products to market, the juggernaut rolls on, aided by revenues from its cloud computing, app store and other services.
Microsoft – up 202% over five years
Microsoft is the veteran of the tech world that defied the doubters last decade to become an even more dominant force in computing.
Its Office 365 suite of applications is still essential for most businesses and many homes, its cloud computing business is first class, and it has become a generative AI pioneer through its partnership with Open AI, the maker of Chat GPT.
Apple shares have rocketed 251% over the past five years and are Trading 212 isa investors’ second most held stock
Tesla – up 1,331% over five years
Tesla still gets referred to as an electric car maker but that seriously undercooks the reach and ambition of Elon Musk’s business.
It has gone from being an EV pioneer, to its groundbreaking Model S and Model 3 setting the benchmark for the car industry in the shift to electric power, and on to an all-encompassing clean energy company.
Cars remain at the heart of the business and Tesla has ramped up production to impressive numbers as Musk cracks the whip. At the same time the company has a nice little earner selling credits to established car firms that don’t sell enough EVs.
Amazon – up 144% in five years
Amazon is also far more than the online retailer label it is commonly given. It is a dominant force in the digital shopping experience, selling and delivering goods itself and creating a huge marketplace for others to sell on.
But it is also a tech giant, with a huge and highly profitable cloud computing arm, Amazon Web Services, and it now also has a chipmaking arm, where it is targeting AI computing and some of Nvidia’s blockbuster profits.
Amazon is also an entertainment giant, with its Prime Video and Music services sitting alongside its Kindle e-reader, makes and sells its own Fire electronic devices, and offers delivery and logistics services to other businesses.
Finally, Amazon is also, somewhat bizarrely, a grocer through its Whole Foods supermarket ownership.
The rest of the top ten Isa holdings with five-year total returns
Alphabet – up 177%
Meta Platforms – up 201%
Rolls-Royce – up 121%
Coca-Cola – up 40%
BP – down 5%
When investing, your capital is at risk and you may get back less than invested. Past performance doesn’t guarantee future results. Other fees may apply. See terms and fees. Tax treatment depends on your individual circumstances and regulations which may change. This information is not investment advice. Do your own research.