Home Business News Long-term asset funds to breathe new life into the Innovative Finance ISA

Long-term asset funds to breathe new life into the Innovative Finance ISA

by LLB Finance Reporter
23rd Nov 23 7:14 am

The government has confirmed plans to allow Long-Term Asset Funds in an ISA from April 2024, which has the potential to bring world class private market funds into ISAs.

Th open-ended property funds with extended notice periods also to be included and the detail is provided in Autumn Statement documents.

Jonathan Moyes, Head of Investment Research at Wealth Club said, “The world’s most sophisticated investors, from endowment funds to sovereign wealth funds and family offices have long understood the benefits of investing in private markets as part of a diversified portfolio.

“With companies staying private for longer, much of the world’s growth and innovation is accruing in private hands. The decision to allow Long-Term Asset Funds within an ISA provides investors with the potential to gain exposure to this growth, in a tax efficient manner.

The move also  promises to breathe new life into the ailing Innovative Finance ISA.

Latest data shows a mere £144 million was invested into Innovative Finance ISAs in 2021/22, a shadow of its former self and just 0.2% of all ISA subscriptions. The drop in interest is understandable. Once associated with peer-to-peer loans, the innovative finance ISA has a short but chequered past.

The inclusion of LTAFs should see the wrapper become a more compelling option for wealthy investors.”

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