Lukewarm attitudes towards ISAs

	Rate (AER)	Notice
Icesave	6.10%	Instant
* Based on £3,600 Instant Access Cash ISA and is a limited guide to the market

The majority of active investors are either undecided or won't be investing in an ISA before April 6th, according to new research from New Star Investment Funds.

The research, carried out by NMG Research, surveyed 335 active investors across the UK. Of those polled, 62% said they would forfeit their ISA allowance this year whilst only 38% indicated they were considering taking out an ISA before the tax year end.

Some 10% cited nervousness about markets and the general economy as the reason not to take out an ISA this year whilst 27% expressed other reasons and 25% remained undecided.

If those surveyed were to invest in an ISA this tax year, 44% would opt for a cash ISA, 11% would opt for a UK equity growth ISA and 8% would plump for a UK equity income ISA. Asia and emerging market funds - the strongest performing markets in recent years - would each account for just 4% of investors' choices.

Meanwhile, 19% of those questioned said they didn't know where they'd invest if they were to take out an ISA this tax year.

Richard Wilson, marketing director of New Star, makes the point that although 44% of investors would consider a cash ISA this year they should weigh up the fact that over the past 20 years cash has returned 308.5% compared to superior returns of 607.6%, 581.1% and 417.8% from direct UK commercial property, UK equities and bonds respectively (sources: Investment Property Databank, Datastream).

15 July 2008 © Moneyextra.com

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