Designing a long-term ISA portfolio that works

By Juliet Schooling Latter on 26 March 2026 in Income investing

Individual Savings Accounts (ISAs) are ideal long-term savings vehicles, offering a tax-efficient environment for your money to grow. But how do you turn that into a portfolio built for the next 10 years? What should you consider, and which types of funds make suitable long-term holdings?

Why invest in a 10-year ISA?

For many people, 10 years is a great timeframe for investing. It’s long enough to benefit from meaningful growth, but still short enough to work towards a defined goal. Over this period, the compounding effect of regular contributions and investment returns can start to make a real difference.

A decade also gives you time to ride out most market cycles, allowing your investments the space to recover from short-term volatility and deliver over the long term.

However, there’s no one-size-fits-all ISA portfolio. The right approach will depend on where you are in life, your financial goals and your attitude to risk. Someone who has recently retired and needs a steady income will invest very differently from someone in their twenties focused on long-term growth.

That’s why it’s important to be clear on your objective from the outset. Are you aiming to reach a specific financial target within 10 years, or simply build wealth over time? From there, you can think about risk. Your tolerance for risk is closely linked to both your goals and your time horizon, but also to your wider financial position. For example, are you relying heavily on this ISA, or do you have other assets to fall back on?

Equally important is how you respond to market movements. Are you comfortable with short-term volatility, or would temporary losses cause concern? Higher potential returns typically come with greater risk, so understanding where you sit on that spectrum is key before building your portfolio.

In a recent interview, Maneesh Bajaj, manager of the Brown Advisory US Flexible Equity fund, gives investors his key messaging on why staying the course matters more than ever.

Building your long-term ISA portfolio

It makes sense to take a core-satellite approach when building for the long term. This means having stable funds at the centre and tweaking the exposure with smaller allocations to other portfolios. For example, a cautious investor may choose to have most of their money in equity income and bond funds, then dial up risk with some growth-oriented funds. As we have already mentioned, the right split between these exposures will depend on your financial goals and risk appetite.

Of course, everyone’s needs are different – and depend on their views and preferences – but here are suggested portfolios for different types of investors.

Multi-asset approach

This investor may not know exactly what they need from their ISA, but wants a broad range of exposures to kick-start the journey. They won’t have strong opinions on asset allocation, aside from wanting a mix of equities and bonds and potentially alternatives, such as infrastructure. It’s the simplest ISA to construct. Simply choose a couple of multi-asset portfolios that have professional fund managers at the helm, making all the decisions.

We like the BNY Mellon Multi-Asset Income fund. It’s in the Mixed Investment 40-85% Shares sector and invests in equities, bonds, and alternatives. There’s also the Jupiter Merlin Growth Portfolio. This is a high-conviction, multi-manager fund of funds run by one of the most respected teams in fund management.

Cautious approach

The objective for cautious investors is to generate steady returns and a reliable income stream with lower volatility. It’s the kind of overall portfolio that enables you to sleep soundly at night. While a decent spread of assets is advisable, equity income funds and bonds will form the bulk of exposures.

We like JPM Global Equity Income. This is a core equity income fund with a particular focus on large- to mega-cap stocks. Holdings currently include Microsoft and TSMC*. Meanwhile, the CT UK Equity Income fund looks for unloved companies listed on the London Stock Exchange that have the potential to grow their dividend payments.

On the bond front, M&G Optimal Income is a go-anywhere portfolio with a flexible mandate that enables its manager to invest across the fixed income spectrum. Then there’s the First Sentier Global Listed Infrastructure fund. This seeks income and some capital growth by investing in listed infrastructure companies worldwide.

Aggressive approach

The largest asset allocation is likely to be in global funds focused on growth companies, with decent exposure to Asia and emerging markets. The rest of the portfolio could be allocated to themes, such as technology and healthcare, with smaller allocations to commodities and smaller companies.

On the global front, we like Nutshell Growth, which is a concentrated, pragmatic fund that invests in exceptional growth companies. Fidelity Asia Pacific Opportunities, meanwhile, benefits from manager Anthony Srom’s high conviction approach to investing in this Asian market.

As far as satellite positions are concerned, the AXA Framlington Global Technology fund is free from benchmark constraints and able to invest in new tech and innovation from around the world. There’s no shortage of commodity and small-cap funds: BlackRock World Mining Trust offers exposure to global mining and metals companies, while the Liontrust UK Smaller Companies fund focuses on companies with strong positions in their sectors.

Income-focused approach

Many investors are focused on generating an income that they can either use themselves or reinvest for future, longer-term benefits.

There are plenty of excellent equity income funds. For example, IFSL Evenlode Global Income focuses on sustainable real dividend growth. It favours companies with strong free cash flows. Alternatives include the Murray International Trust, TM Redwheel Global Equity Income and Fidelity Global Dividend.

Closer to home, Janus Henderson UK Responsible Income aims to provide an income, along with the potential for capital growth. Schroder Income, meanwhile, emphasises absolute return and seeks to balance dividend yield with dividend growth and balance sheet safety. Looking further afield, abrdn Emerging Markets Income Equity is a core, all-cap strategy that invests in dividend-paying companies across emerging markets.

Within alternative areas, M&G Global Listed Infrastructure differentiates itself by investing beyond traditional areas. Its exposures include data centres. We like a number of strategic bonds as their managers have more flexibility. Great examples include GAM Star Credit Opportunities, which invests in the junior debt of investment grade companies. This approach enables it to generate a good income while still maintaining a high-quality portfolio.

*Source: fund factsheet, 28 February 2026