Stocks & shares ISAs worst performance in a decade | moneyfacts.co.uk
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Derin Clark

Derin Clark

Online Reporter
Published: 21/04/2020

Investors will be disappointed to find that stocks & shares ISAs recorded their worst performance in over a decade during the last tax year, as funds felt the impact of the Coronavirus pandemic.

The average stocks & shares ISA fund fell by 13.3% during the 2019/20 tax year, after three consecutive tax years in which it recorded positive gains. Only two previous tax years have seen heavier falls – the 2002/03 tax year when it fell by 19.7% and during the financial crisis of 2008/09 when it fell by 20.3%.

As a result of the disappointing stocks & shares ISAs performance, savers using cash ISAs would have seen more favourable returns during the 2019/20 tax year.

Which ISA fund sectors were hardest hit?

One of the hardest hit fund sectors was UK equity funds, with the average UK Equity Income fund falling by 26.9%, UK All Companies funds falling by 25.5% and UK Smaller Companies funds dropping by 20.6%. European Smaller Companies, which fell by 20.6%, and Japanese Smaller Companies, which dropped 23.6%, were the only other fund sectors that posted comparative losses.

By contrast, UK Gilts, which increased by 12.2%, and Global Bonds, rising by 6.7%, were the best-performing ISA fund sectors.

Average ISA performance during 2019/20 tax year

2019/20 tax year % growth 
Average stocks & shares ISA -13.3%
Best-performing stocks & shares ISA fund sector 12.2% (UK Gilts)
Worst-performing stocks & shares ISA fund sector  -26.9% (UK Equity Income)

Source: Investment Life & Pensions Moneyfacts/Lipper 

Commenting on the stocks & shares ISA performance, Richard Eagling, head of pensions and investments at Moneyfacts, said: “These are extraordinary times for investors, as shown by the fact that cash ISAs outperformed the average stocks & shares ISA in the 2019/20 tax year. The Coronavirus pandemic means that stock markets are experiencing unprecedented volatility and investment returns across most fund sectors have naturally been hit hard. As dismal as the last tax year has proved to be for investors, it is unlikely to dampen enthusiasm for stocks & shares ISAs too much, as their long-term case remains compelling.”

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