What’s inside a millionaire’s Stocks and Shares ISA?
Over the past two decades, the Stocks and Shares ISA has become one of the UK’s most powerful wealth-building tools. Offering tax-free returns on investments up to £20,000 a year, it’s no surprise that some long-term investors have used this wrapper to amass ISA portfolios worth over £1m.
Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions.
But what exactly does a millionaire’s Stocks and Shares ISA look like? And more importantly, what can everyday investors learn from it?
A consistent, long-term mindset
First and foremost, building a seven-figure ISA doesn’t happen overnight. HMRC data suggests that ISA millionaires have contributed consistently since the scheme’s inception in 1999. Many started with modest sums but focused on reinvesting dividends, staying invested through downturns and allowing compounding to do the heavy lifting.
Unlike short-term traders, ISA millionaires are typically Warren Buffett-style investors — in it for the long haul. They favour quality businesses with reliable cash flow, strong competitive advantages and the ability to grow profits year after year.
Key habits include consistent monthly contributions, reinvested dividends and exceptional patience. These investors don’t tinker with their portfolios often — they choose great businesses to hold for decades.
An ISA millionaire portfolio
While every portfolio’s different, I’ve gleaned some insights from interviews and data regarding ISA millionaires. The following themes tend to show up frequently.
Blue-chip dividends: FTSE 100 stalwarts such as Unilever, Diageo, Legal & General, and National Grid often feature in millionaire ISAs. These companies have a history of paying steady and growing dividends, which can be reinvested to accelerate portfolio growth.
Global exposure: Rather than limiting themselves to the UK, many investors diversify globally through direct holdings or investment trusts. Popular choices include Scottish Mortgage Investment Trust or Fundsmith Equity Fund, both of which focus on high-growth international stocks.
Under-the-radar growth stocks: Some ISA millionaires focus on lesser-known mid-cap stocks that quietly deliver consistent earnings growth. Companies like Games Workshop, Diploma or Halma have been standout performers over the years.
A stock to consider
The global credit data and analytics company Experian (LSE: EXPN) is a prime example of a stock that long-term ISA investors might quietly accumulate. Operating in over 30 countries and serving both consumers and businesses, it enjoys a powerful competitive moat through its vast proprietary data sets and high switching costs for clients.
In 2024, revenue grew 7% but earnings fell slightly, bringing its net margin down to 15.5% from 16%. Earnings per share (EPS) came in at £1.20, slightly missing expectations of £1.22. The miss has been attributed to higher non-benchmark restructuring costs and non-cash financing fair value remeasurements.
Still, since 2020, the business has delivered overall earnings growth and boasts high operating margins. Its success is driven by a steady demand for credit risk assessment, fraud prevention and data-driven marketing services.
For ISA investors seeking capital growth, Experian’s strong track record of dividend growth, share buybacks and global expansion makes it an attractive core holding. With increasing digitalisation and regulatory focus on responsible lending, the company is well placed to benefit from long-term structural trends.
Though its dividend yield is modest, the compounding effect of reinvested gains over time makes it worth considering for a Stocks and Shares ISA.
The post What’s inside a millionaire’s Stocks and Shares ISA? appeared first on The Motley Fool UK.
But this isn’t the only opportunity that’s caught my attention this week. Here are:
5 Shares for the Future of Energy
Investors who don’t own energy shares need to see this now.
Because Mark Rogers — The Motley Fool UK’s Director of Investing — sees 2 key reasons why energy is set to soar.
While sanctions slam Russian supplies, nations are also racing to achieve net zero emissions,
he says. Mark believes 5 companies in particular are poised for spectacular profits.
Open this new report — 5 Shares for the Future of Energy
— and discover:
- Britain’s Energy Fort Knox, now controlling 30% of UK energy storage
- How to potentially get paid by the weather
- Electric Vehicles’ secret
backdoor
opportunity - One dead simple stock for the new nuclear boom
Click the button below to find out how you can get your hands on the full report now, and as a thank you for your interest, we’ll send you one of the five picks — absolutely free!
More reading
Mark Hartley has positions in Diageo Plc, Legal & General Group Plc, National Grid Plc, Scottish Mortgage Investment Trust Plc, and Unilever. The Motley Fool UK has recommended Diageo Plc, Experian Plc, National Grid Plc, and Unilever. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
