Best ETFs to have in a Lifetime ISA

Are you choosing investments for your Lifetime ISA? Not sure where to start? ETFs can be a great, beginner-friendly investment. We asked Ben Yearsley, Investment Consultant at Fairview Investing, to tell us his top picks for beginners who aren’t sure what to put in their LISA.

The investments you choose for your Lifetime ISA very much depend on what you plan to use it for. If you’re using it for a house purchase in the very near future, it makes sense to stick with cash or a near-cash option – so you can sleep easier at night knowing your money is safe and easy to access when you need it. This has become an even better option since interest rates have risen. However, cash may leave you vulnerable to rising inflation in the longer-term.

With that in mind, if you have longer to invest – say, five years or more - you could consider a lower risk investment option. This can help you to ensure that your money keeps pace (and hopefully, outperforms) inflation, whilst still keeping risk to a minimum. After all, this is money you’re using for important things – a first home or your retirement. You want to keep it safe. So how can you invest with this in mind?

Ben Yearsley, Investment Consultant at Fairview Investing, thinks ETFs can be a great addition to a sensible LISA portfolio as a way to access dozens of shares all in one go, keeping you diversified and therefore helping to minimise risk. We asked for his top picks.

Wisdom Tree UK Equity Income ETF

The Wisdom Tree UK Equity Income ETF is a cheap way to get access to the UK’s largest dividend-paying companies. It has an ongoing charge of just 0.29% and its largest holdings are heavyweight household names such as Land Securities, Rio Tinto, Vodafone and NatWest.