Where I’m investing my ISA this year

The biggest mistake I ever made with my investments was not derisking fast enough as I was nearing what I’d been saving for.

I was investing to buy my first home, which felt a good few years off. But thanks to the post-Covid stock market surge of 2020-21 and a salary boost from a new job, my goal was suddenly closer than expected. I found myself selling to fund a deposit when stock markets were tumbling in the 2022 sell-off.

• Get updates on markets, ISA funds, pension saving and much more

I’ve learnt my lesson and this year my ISA strategy is a story of two halves: money for the medium term and money for the very long-term future me.

I’m likely to have some big outgoings in the next few years - a combination of an upcoming wedding and wanting to upgrade our one-bed starter flat to something bigger is likely to eat up a chunk of my savings.

I’m therefore starting to derisk a portion of my ISA investments well in advance of needing that money.

I’ve banked some of my investment gains and moved the money into a money market fund. This aims to pay a cash-like return by investing mostly in relatively low risk bonds that are maturing soon. This should hopefully mean it preserves (and ideally grows a little) the value of my savings in the run-up to my big expenses.

But, given I am only 30 and don’t anticipate needing the rest of my savings for many years, I am happy to accept reasonably high levels of risk with my other investments.

• Read: How much should you have saved by 30, 40, 50 & 60?

That means allocating more to stocks and shares - and I’m going to do that by directing my new ISA contributions into three funds.

The first is Artemis SmartGARP Global Emerging Markets Equity. This fund invests in fast-growing economies, particularly those in Asia, using fund manager Artemis’ in-house screening tool. The strategy aims to identify companies that offer “Growth at a Reasonable Price (GARP)”. It has big holdings in Asian tech stocks such as Samsung Electronics, Taiwan Semiconductor Manufacturing Company, and Tencent.

I already have strong exposure to emerging markets - around 18% of my portfolio is invested there via funds such as Baillie Gifford Pacific and this Artemis fund. I’ve held these for several years, and they have done very well for me so far. I am hopeful the run will continue as more money potentially moves out of the US and into other markets. The innovation happening in countries like China and India is pretty incredible and I don’t think that story is over yet.

• Read: China’s resurgence means investors are scrambling to return

Aside from my emerging market funds, I also have sizeable holdings in global trackers.

I am conscious this means I have a portfolio that is highly skewed towards growth stocks and particularly tech companies in the US and Asia which could be hit hard if AI does not deliver all that it promises.

I therefore want to add something a bit different and have chosen Fidelity Special Situations as my second fund for 2026. The fund manager, Alex Wright, looks for companies that are undervalued by other investors and most of the holdings are based in the UK - a market that did very well last year, but one which I have very little exposure to.

It’s a fund that my colleague Tom Stevenson selected as one of his top picks for the year and I think it will be a nice diversifier for my portfolio.

• Read: My fund picks for 2026

These first two picks are both actively managed funds, and both play into the idea there will be a rotation out of US stocks.

However, people have been calling the top of the American market for years - and saying that passive funds with high exposure to big US tech will underperform. Yet year after year, these funds have continued to outperform.

So, I am hedging my bets and continuing to invest in the “passives will always win” theory with my third fund: Fidelity Index World.

Ultimately, I have no idea what will happen to stock prices. History suggests when that’s the case, you’re better off just letting the market do its thing and coming along for the ride.

Hopefully this spread means I cover most bases and don’t have to worry about FOMMO (Fear of Missing Market Outperformance).

• Read: Which global index fund is best for you?
• More on Artemis SmartGARP Global Emerging Markets Equity
• More on Fidelity Special Situations
• More on Fidelity Index World.

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Overseas investments will be affected by movements in currency exchange rates. Investments in emerging markets can be more volatile than other more developed markets. Reference to specific securities should not be construed as a recommendation to buy or sell these securities and is included for the purposes of illustration only. Before investing, please read the relevant key information document which contains important information about each fund. Eligibility to invest in an ISA and tax treatment depends on personal circumstances and all tax rules may change in the future. This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.