Stocks and Shares ISA in the red? Here’s how to try and get back on track
Using a Stocks and Shares ISA to invest is a fantastic way to build wealth. But in 2025, it seems not everyone’s been making a lot of money. While both the FTSE 100 and FTSE 250 have been on the rise, many equity funds have seemingly struggled to keep up. And that includes funds managed by industry favourites such as Terry Smith and Nick Train.
It seems that relying on actively-managed funds in 2025 has led to many ISAs tumbling into the red. And subsequently, an estimated £7.1bn of investor capital has been pulled out of these funds in just the first two months of the year, according to AJ Bell.
Suffering investment losses from time to time is a normal part of the wealth-building journey. After all, stocks don’t just go up forever, and even the best-looking businesses can fail to deliver on expectations. Yet the key is to learn from past mistakes and steer a portfolio back on track.
Improving returns in 2025
If actively managed funds aren’t meeting expectations and the fund managers are failing to effectively communicate why, then exploring new options could be in order. The most obvious and growing popular wealth-building alternative is to opt for passive index funds.
These carry significantly lower fees and guarantee that investors will earn the same return as the market. In the short term, the performance of indices like the FTSE 100 is near-impossible to predict. But over the long run, investors have reaped average gains of between 6% to 10%. Assuming this continues to be the case in the future, investors can expect to eventually recoup their ISA losses and start building wealth again over the long term.
However, there’s an alternative approach available. Instead of relying on an expensive industry professional seemingly getting it wrong, why not start picking stocks directly?
Taking control
But being a successful stock picker is far easier said than done. There are a lot of critical factors to consider in an ever-changing market environment. But by identifying the best businesses, individual retail investors have gone on to earn spectacular returns.
Take a look at Fresnillo (LSE:FRES) as a prime example. The Mexican gold and silver mining enterprise has seen its share price surge by almost 120% since the start of the year, driven by a combination of operational milestones and higher commodity prices.
Demand for the group’s products has surged as gold becomes increasingly popular as geopolitical tensions rise. And with production along with ore grades steadily increasing, investor sentiment has drastically improved compared to the last four years.
Finding beaten-down opportunities with comeback potential is certainly a stock-picking strategy that can yield terrific results like this one. But it’s also crucial to recognise it’s never without risk.
The regulatory environment for Mexico-based miners is growing increasingly strict, which could limit further mine development and long-term production volumes. That could prove especially problematic as the group’s existing mines steadily move towards the end of their productive lives. A failure to find and develop new projects to offset the loss of production would directly compromise earnings and, with it, the share price.
Nevertheless, Fresnillo goes to show that when a stock-picking strategy’s successful, it can yield tremendous returns for a Stocks and Shares ISA, even when there are risks to carefully consider.
The post Stocks and Shares ISA in the red? Here’s how to try and get back on track appeared first on The Motley Fool UK.
But here’s another bargain investment that looks absurdly dirt-cheap:
Like buying £1 for 31p
This seems ridiculous, but we almost never see shares looking this cheap. Yet this Share Advisor pick has a price/book ratio of 0.31. In plain English, this means that investors effectively get in on a business that holds £1 of assets for every 31p they invest!
Of course, this is the stock market where money is always at risk — these valuations can change and there are no guarantees. But some risks are a LOT more interesting than others, and at The Motley Fool we believe this company is amongst them.
What’s more, it currently boasts a stellar dividend yield of around 10%, and right now it’s possible for investors to jump aboard at near-historic lows. Want to get the name for yourself?
More reading
- Looking for long-term FTSE 100 stocks? Here’s 1 to consider holding for 10 years!
- Thinking of investing £10,000 in the FTSE 100? Here’s how much money investors have made in 2025 so far
- This FTSE 100 stock’s up 155% in a year! Still time to consider buying?
- As the Rolls-Royce share price hits a new high, 3 FTSE 100 stocks are flying higher
- As silver prices explode, Fresnillo stock is fast approaching a runaway train
Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo Plc. 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.
