Designing an ISA that evolves with you

By Juliet Schooling Latter on 9 March 2026 in Basics

There’s no single formula for building the perfect ISA portfolio. The right mix of investments will depend on your personal circumstances, including your time horizon, financial goals and attitude to risk. What does tend to change for most investors, however, is how those priorities shift over time.

Early in your investing journey the focus is often on growing your wealth. As retirement approaches, generating a reliable income becomes more important. Later in life, protecting the capital you’ve built may take centre stage.

Rather than trying to balance all these objectives equally from the start, many investors gradually tilt their portfolios over time. Growth investments may dominate in the early years, while income and more defensive holdings are introduced gradually as priorities evolve.

This doesn’t mean making sudden or dramatic changes. Instead, it’s usually a process of small adjustments over time, adding new types of funds or increasing allocations as circumstances change.

With that in mind, let’s look at how growth, income and protection can each play a role at different stages of an investor’s journey.

Stage one: prioritising growth

For investors at the beginning of their journey, time is often their greatest advantage. With decades before they need to draw on their savings, short-term volatility tends to matter less.

At this stage, portfolios are often heavily weighted towards capital growth-oriented funds. These strategies typically invest in companies operating in expanding industries, innovative businesses or regions of the world with strong economic potential.

The trade-off is that growth investments can be more volatile. Returns are rarely smooth and periods of market turbulence are inevitable. However, investors with long time horizons are often better placed to ride out these fluctuations in pursuit of higher long-term returns.

Stage two: introducing income

As investors start to think about retirement more seriously, the role of income within a portfolio may start to increase. Income-generating investments, such as dividend-paying equities or bonds, can help provide a steady stream of income. Importantly, introducing income doesn’t mean abandoning growth. In many cases adding income is another layer of diversification. And if you don’t need the income quite yet, payments can also be reinvested to benefit from compounding.

Stage three: capital protection

For investors entering, or already in, retirement, your priorities may change again. At this point, you might look to preserve the wealth you’ve built. This could mean trimming down growth exposure in favour of more defensive funds. The aim at this stage is to reduce volatility and improve your risk-adjusted returns.

Adding a protecting element can help investors feel more comfortable during periods of market stress, particularly when you may be relying on your investments to support your lifestyle.

Although it’s important to note that protection doesn’t mean eliminating risk. Even in retirement, many investors maintain a mix of growth, income and defensive holdings to ensure a diversified and balanced portfolio to support them over the long term.

Adjusting your ISA over time

The transition between theses stages rarely happens overnight. In reality, you’ll be adjusting your portfolio over the years as your financial situations evolves.

Someone in their thirties, for example, may hold mostly growth funds but begin to introduce income strategies later in their career. Similarly, a retiree may still retain growth investments to help their portfolio keep pace with inflation, while increasing their exposure to defensive or income-generating assets.

Fund suggestions

With that in mind, the following funds highlight strategies that could play different roles within an evolving ISA portfolio.

Growth funds

Emerging regions of the world are a popular focus for growth-oriented investors, as well as smaller, innovative companies and developing sectors.

FSSA Global Emerging Markets Focus invests in 40-45 large and medium-sized companies in emerging markets such as China, Taiwan, India, Brazil and South Korea. Lead manager Rasmus Nemmoe has put together a fund in which every holding is a quality company that has enjoyed sustained and predictable growth over the long term.

You can also consider a broader global growth portfolio. WS Montanaro Global Select is an unconstrained quality growth strategy that scours the globe for small and mid-cap names. We like the Montanaro approach and this high-conviction fund’s focus on finding profitable businesses with long runways for growth and sustainable competitive advantages.

Funds concentrating on particular sectors are also worth considering for the growth portion of an ISA strategy. Landseer Global Artificial Intelligence is a prime example. Artificial intelligence is already changing how we live and work, and this portfolio invests in companies that leverage AI to their advantage.

Income funds

Next, we move on to funds that can generate an income. As with the growth options, you can find income funds focused on different regions.

Our first suggestion is the Rathbone Income fund run by Carl Stick and Alan Dobbie. This is a multi-cap UK equity income fund that invests in businesses with high-quality, visible earnings. We see this fund as a core equity income holding because it boasts one of the best track records in the sector for raising dividends annually for more than two decades.

Broadening the net, you have the BlackRock Continental European Income fund. It favours undervalued European companies offering reliable, sustainable dividends. It’s also well-diversified, with exposure across a wide range of sectors and geographies, while the 10 largest holdings account for around 30% of assets under management.

Fixed income investments are another attractive holding for this segment. M&G Optimal Income fund has a go-anywhere, flexible mandate that enables it to invest across the fixed income spectrum.

Defensive funds

Defensive funds aren’t about chasing the highest returns, they’re designed to protect wealth, manage risk and deliver smoother performance across market cycles.

Janus Henderson Absolute Return aims to deliver a positive absolute return over rolling 12-month periods. The managers carefully select stocks they believe will outperform or underperform analysts’ expectations, taking both long positions (profiting when shares rise) and short positions (profiting when shares fall).

Next is the Polar Capital Global Insurance fund, which offers exposure to a specialist and often undervalued sector. Led by Nick Martin, who has decades of experience analysing risk and casualty insurers, the fund typically holds a concentrated portfolio of around 30–35 companies globally. Its focus on insurers with strong underwriting and defensive cash‑generative characteristics can make it a useful stabiliser in a portfolio, offering diversification away from broader equity markets.

Our final suggestion is the Artemis Short-Duration Strategic Bond fund. This “steady Eddie” of the defensive space invests globally in government and corporate bonds, as well as asset-backed and mortgage-backed securities. Its focus on risk management makes it a useful stabiliser in a portfolio as investors approach or when in retirement.