The best performing Stocks & Shares ISAs

Keen to get investing or already investing your hard earned money in a Stocks and Shares ISA and thinking of switching the best one? We’ve got you covered. Here’s the best performing Stocks & Shares ISAs.

The best performing Stocks and Shares ISAs

Here’s the best performing Stocks & Shares ISAs, where all you need to do is add your money, and the experts take care of the rest. We’ll explain how that works in more detail below.

Best performing Stocks & Shares ISA

Average performing Stocks & Shares ISAs

How did we work it out?

We took the 3 most popular Stocks & Shares ISA providers in the UK: Nutmeg, Moneyfarm, and Wealthify, to see which is the best performing.

To work out the performance of each Stocks & Shares ISA provider, we looked at the yearly growth (investment increase, or ‘return’) for the last 5 years, and for each risk level.

What’s a risk level you ask? (Don’t let the word ‘risk’ put you off!) Every Stocks and Shares ISA managed by experts has options from low risk to high risk, and the higher the risk level is, the more your money could grow over time.

However, higher risk also means there could be more ups and downs in the short term (called volatility), but this should smooth out over the long term and result in bigger returns.

With lower risk, there’s less ups and downs in the short-term, which also means lower returns over the long term too. Normally these options mean more of your money is invested in things that don’t grow as much but could provide a regular income instead (such as bonds and property, more on those later).

All make sense?

There’s 4 categories we've looked at, lower risk, medium risk, high risk and highest risk.

Comparing against the industry average

Comparing Stocks & Shares ISAs between each other is great, but there’s a lot of different investment options out there, and these are called investment funds.

You can buy these within a self-managed investment ISA – we’ll cover those below (but they're not recommended for most people, unless you know about investing). It’s often best to stick to expert-managed Stocks and Shares ISAs, where the experts handle it all for you.

Anyway, all of these investment funds combined, represent the average, and this makes Stocks & Shares ISAs easier to compare.

We’ll call this the industry average. The data is actually put together by an expert investment firm called Asset Risk Consultants (ARC), and they have a collection of all the relevant funds grouped together and tracked for each risk type, and they call these indexes.

The indexes we’ve used are:

• Lower risk: ARC Cautious Private Client Index
• Medium risk: ARC Balanced Asset Private Client Index
• Higher risk: ARC Steady Growth Private Client Index
• Highest risk: Equity Risk Private Client Index

Right, that’s the method, so let’s dive into the results.

Lower risk investment performance results

Total performance after 5 years

Performance each year

Best performing: Moneyfarm

Moneyfarm is the best performing ISA over the last 5 years, with a very impressive total return of 8.3%. That’s better than the industry average and much better than Nutmeg, with a very poor 1% return. Wealthify performed slightly better than Nutmeg with 2.7%.

Lower risk investment ISA information

The risk levels we’ve used for each Stocks & Share ISA are:

Nutmeg: Level 3
Moneyfarm: Level 3
Wealthify: Tentative
Industry average: ARC Cautious Private Client Index

Medium risk investment ISA performance results

Total performance after 5 years

Performance each year

‍Best performing: Moneyfarm

Moneyfarm is the best performing ISA for medium risk too. With again an impressive 11.5% increase over the last 5 years. That’s better than the industry average (9.7%) and more than double Nutmeg (5.7%), and much better than Wealthify too (7.7%).

Medium risk investment ISA information

The risk levels we’ve used for each Stocks & Share ISA are:

‍Nutmeg: Level 5
Moneyfarm: Level 4*
Wealthify: Confident
Industry average: ARC Balanced Asset Private Client Index

*Moneyfarm has fewer risk options than Nutmeg, and so the levels don’t quite align, but they’re the same risk option, just with different numbers.

Higher risk investment ISA performance results

Total performance after 5 years

Performance each year

‍Best performing: Moneyfarm

Again, Moneyfarm has performed the best with a massive 21% return over the last 5 years. That’s a full 7% above the industry average of 14%, and significantly better than both Nutmeg (14.4%) and Wealthify (13.5%).

Higher risk investment ISA information

The risk levels we’ve used for each Stocks & Share ISA are:

Nutmeg: Level 7
Moneyfarm: Level 6*
Wealthify: Ambitious
Industry average: ARC Steady Growth Private Client Index

*Moneyfarm has fewer risk options than Nutmeg, and so the level numbers don’t quite align, but they’re the same risk option, just with different numbers.

Highest risk investment ISA performance results

Total performance after 5 years

Performance each year

Best performing: Moneyfarm

And finally, you’ve guessed it, Moneyfarm wins again. That’s wins on all 4 categories! An impressive 26.7% return over the last 5 years – much better than the average, and again much better performance than both Nutmeg (23.3%) and Wealthify (17.8%).

Highest risk investment ISA information

The risk levels we’ve used for each Stocks & Share ISA are:

Nutmeg: Level 9
Moneyfarm: Level 7*
Wealthify: Adventurous
Industry average: Equity Risk Private Client Index

*Moneyfarm has fewer risk options than Nutmeg, and so the level numbers don’t quite align, but they’re the same risk option, just with different numbers.

The best performing Stocks and Share ISA

There’s a pretty clear winner here, at whatever risk level you look at Moneyfarm¹ wins. They’ve really run away with it, and have made some seriously impressive gains, especially against Nutmeg.

Beating the industry average is great, but to achieve it across the board in all 4 categories is excellent.

To put it into perspective, both Nutmeg and Wealthify struggled to beat the industry average on any of the categories. Wealthify never achieved it, and Nutmeg only achieved it on their higher risk option.

Here’s a recap over the last 5 years

Lower risk

Medium risk

Higher risk

Highest risk

So what about 2nd place? That’s got to be Wealthify, although there’s not too much in it with them and Nutmeg. Nutmeg’s very low performance of 1% on their lower risk option against an industry average of 5.3% is poor, and they’ve also come in far below the average on the medium risk option with 5.7% compared to 9.4%, that's 4% worse!

Overall, it’s a pretty great performance from Moneyfarm. If you’d have invested 5 years ago, you’d be quids in. Who knows what the future might hold.

Good past performance doesn’t mean it will last into the future, but it can be a good insight into the investment team and how well they might perform going forward.

If you want to learn more about Moneyfarm, here’s our Moneyfarm review. They’re 5* rated and highly recommended. Not only is the investment performance the best, but they also have expert advisors to talk you through your options and the app is easy to use, and great at tracking your portfolio (total amount of money invested and the performance). 

What's more, it’s also the cheapest of the 3. How great is that? To get started, here’s the Moneyfarm website¹. 

Learn more about Stocks & Shares ISAs

Quick overview

A Stocks and Shares ISA is an investing account that allows you to save up to £20,000 per year (called your annual ISA allowance), and everything you make within the account is completely tax-free!

That means as your money grows, you won’t pay any Capital Gains Tax, Income Tax, or Dividend Tax – which are all types of tax that you might pay on investments outside of an ISA.

There’s one important thing with Stocks & Shares ISAs, you can only add money to one each tax year (April 6th to April 5th the following year). So pick wisely! Our recommendation is Moneyfarm¹, thanks to the great investment performance, low fees and ease of use.

You can still invest if you already have a Stocks and Shares ISA, just use a General Investment Account (GIA). These are exactly the same, except you might have to pay Capital Gains Tax (and other taxes) if you make a large profit (you’ll pay tax when you sell investments).

Note: your annual ISA allowance (the £20,000) can be split across all your ISAs, such as a Cash ISA (cash savings account) and a Lifetime ISA (save for your first home) too.

Nuts About Money tip: Cash ISAs aren’t recommended these days, as you get a Personal Savings Allowance each tax year with a regular savings account – meaning you don’t pay tax on any interest you make (up to a limit).

Is it safe to invest in a Stocks & Shares ISA?

It’s perfectly safe to invest your money within a Stocks & Shares ISA. All ISA providers have to be approved and are authorised by the Financial Conduct Authority (FCA). That means they have to show they are looking after customers' money and investments in the correct way, and regularly audited.

It also means you are protected by the Financial Services Compensation Scheme (FSCS). This means should anything happen to your investment provider (very unlikely), you’ll get up to £85,000 back in compensation. Also, as part of the FCA rules, your investments will actually be held solely in your name, with a large bank, and can only be returned to you. 

However this doesn’t mean you can’t lose money, there’s still investment risk, your investments could still go down in value. But with the right investment strategy, typically over the longer term, ISAs grow in value.

How do investments work?

When we talk about Stocks and Shares ISAs, we mean expert-managed ISAs. That’s where you use an easy to use investment platform or investment app, add your money, and the experts take care of the rest.

The experts aim to grow your money over the long term by using safe and sensible investment strategies. They do this by investing your money in investment funds and all these investment funds together this is called an investment portfolio. Investment funds are groups of lots of different investments all pooled together into an easy to manage investment, and managed by an expert fund manager.

These funds can be bought and sold, often on a stock exchange (a place to buy and sell investments), also called the stock market. Funds that trade on a stock exchange are called exchange-traded funds (ETFs).

As the experts buy and sell funds, it's common to have a small trading fee included with ISAs, alongside an annual platform fee, or management fee. Sometimes these fees are hidden.

Types of investments

Within an investment fund, there are lots of different types of investments. The main ones are:

Stocks and shares (equities): these are where you buy part of a company, a share of the company. And if the company does well, the value typically increases. They can also pay out their profits to shareholders, called dividends.

Bonds: this is where you effectively loan your money to governments and large corporations in return for interest. Typically these are lower risk.

Property: often commercial properties that generate income (pay rent).

Are Stocks & Shares ISAs good value?

Yes! Typically expert-managed Stocks & Shares ISAs are great value, they are cheaper than financial advisors and wealth managers, as they use technology (an app) to show you your performance and investment portfolio, rather than a dedicated financial advisor. 

That means they can charge much less as an annual management charge, while still having the same, or in the case of Moneyfarm, better investment portfolios – growing your money more over time!

However, if you have large sums of money, you might benefit from financial advice – they can often help with things such as Inheritance Tax too. You can find great financial advisors with Unbiased¹.

DIY investment platforms

If you know what you are doing, you can invest within a Stocks & Share ISA on a self-managed investment platform (also called a DIY investment platform). This is where you manage your own investments (tax free), and you decide which investments to make and when to buy and sell.

We don’t recommend this for most people – it’s often better to let the experts handle things. But if you’re interested, here’s the best self-managed investment platforms – one of best is InvestEngine¹, it’s completely free, and they also offer ready-made portfolios (where experts handle things).

There we have it

So, there we go. Did you know performance could be so different depending on who you use? 

We’re very impressed with Moneyfarm. They’ve performed exceptionally well at every risk level, far exceeding the industry average on all levels. And much better than both Nutmeg and Wealthify.

What can we take from this then? Well, good results and past performance doesn’t necessarily mean good results in the future, but it can be a great indicator. It potentially shows the investment team at Moneyfarm are on top of their game – they know what they’re doing, and much better than other ISA providers. 

This means you might have a better chance of growing your money in the future by investing with Moneyfarm (but certainly not guaranteed).

We don't mean for this to sound like such a big sell, but Moneyfarm are great at what they do, and we highly recommend them.

Of course the investment performance is the best out there, but it’s also super easy to use, has expert advisors who can help you get started or discuss your investment options whenever you like, and the mobile app is great too – with complete transparency over your money and investments. Plus, it’s one of the cheapest!

If you’re keen to get started, head over to the Moneyfarm website¹.

There is a minimum investment of £500, so if you’re looking to invest less than this, check out Wealthify¹, they came in 2nd, and you can start with just £1. Once you have £500 you could always transfer it over (if it's a new tax year of course).

Good luck investing! Your future self will really thank you.