Interactive Investor

Managed ISA.

Learn what a Managed ISA is, why it can be helpful for beginner investors, and how it compares to a DIY ISA.  

Important information - investment value can go up or down and you could get back less than you invest. If you're in any doubt about the suitability of a Stocks & Shares ISA, you should seek independent financial advice. The tax treatment of this product depends on your individual circumstances and may change in future. If you are uncertain about the tax treatment of the product you should contact HMRC or seek independent tax advice.

What is a Managed Stocks and Shares ISA?  

A Managed Stocks and Shares ISA works the same as a normal Stocks and Shares ISA – you can invest up to £20,000 a year and pay no tax on returns.

The difference is that with a Managed ISA, an expert chooses the investments for you based on your goals and attitude to risk. This takes away the hard work of having to research and select your own investments.

How do Managed Stocks and Shares ISAs work?  

When you open your ISA, you'll define your risk level and savings goals. Your results will match you to a managed portfolio.

Expert investment managers and analysts build each portfolio. They also research every opportunity and diversify portfolios to match your risk profile.

The portfolios may hold a mix or shares, funds, trusts, bonds and more. Most portfolios will track a market index such as the FTSE 100 or S&P 500. This helps to give you a diversified portfolio with lower costs.

Your investment manager will continue to buy and sell investments on your behalf and keep your portfolio balanced to your risk level.

What is a risk profile/level? 

Risk is part of investing. The value of investments can go up as much as they can go down. Before you choose a managed fund to invest in, you'll assess your risk tolerance. Essentially, how much are you comfortable losing if the markets take a turn for the worse?  

Your risk level will define how the investment manager will build your portfolio. For example, a cautious investor's portfolio will hold less volatile investments such as government bonds. Whereas if you are a more adventurous investor, your portfolio will hold more shares.

The major benefit of a Managed ISA is that experts define the right mix of investments for you, so you won’t inadvertently take on too much risk. 

Learn more about balancing risk and reward

Will investments be matched with my values? 

As well as a choice of risk levels, some Managed ISA providers offer ethical portfolios. Where your portfolio will invest in funds that target ethical, social and corporate governance related outcomes. 

If you’re confident selecting your own investments, check out ii’s ACE 40 sustainable list of investments available in ii’s Stocks and Shares ISA. 

Find out more about our Stocks and Shares ISA.  

What are the different ways to invest in a Managed ISA?  

Passively managed ISA  

Passive or index investing is a long-term ‘buy-and-hold' strategy. Your money will rise and fall with the market, and usually follow the performance of an index such as the FTSE 100. It will aim to grow your money without frequent intervention helping to keep costs low. 

Actively managed ISA 

An actively managed ISA involves more frequent review and changes to your portfolio by the investment manager. You will pay a premium vs passive approach, in exchange for the investment manager aiming to outperform the market.

What are the benefits of a Managed Stocks and Shares ISA? 

  • Saves you time -  a team of experts  pick the best investments for you and provide ongoing management aligned to your risk appetite, so you can invest even if you’re too busy to study the market.  
  • Simplifies choice – choosing from seemingly endless investments can be overwhelming, a Managed ISA simplifies your options but still provides with a portfolio tailored to you. 
  • Keeps costs low – the Investment Manager will aim to keep investment costs to a minimum and typically no trading fees apply. 
  • Provides a balanced portfolio at a low cost - you get a diversified portfolio matched to your risk appetite without needing to be an expert or having to regular make changes to your holdings. 

Which is better – DIY or Managed ISA?


Time: You’re responsible for researching companies and choosing where to invest your money, as well as ongoing monitoring.

Investment choice: Choose from thousands of global stocks, bonds and funds.

Cost: You'll pay a platform fee and other charges, such as trading fees. The total cost will depend on what you invest in and how frequently you trade.

Ongoing management: You will be responsible for ongoing buying and selling of investments.

Managed ISA

Time: Experts do the hard work for you. From initial investment section and ongoing management.

Investment choice: investment manager picks funds for you based on your risk profile.

Cost: As well as your normal ISA charges, each portfolio will also charge a fee to cover the day-to-day management costs of the underlying investments. The portfolio fees you will be charged will be illustrated to you before you invest.

Ongoing management: The investment manager will make buy and sell decisions on your behalf in line with your risk profile.

Please remember: Both DIY and managed options carry risk – whether you manage risk yourself or choose a Managed ISA, it’s important to know that the value of your investments may go down as well as up. If you are unsure about the suitability of a Stocks and Shares ISA, you should seek advice from an authorised financial advisor. 

Who are Managed Stocks and Shares ISAs for?

It’s great for beginners:

  • A Managed ISA makes investing simple.

  • Leave the hours of research to the experts.

  • Reduces the risk of making a mistake.

And for seasoned investors:

  • A Managed ISA is a great way to supplement your existing investment strategy.

  • Experts can look after your core investments while you focus on something else.

  • If you are short on time, a Managed ISA can be a quick entry to market without any hassle.

Learn more about our Stocks and Shares ISA

Learn how to make the most of your Stocks and Shares ISA with our useful guides.

Investment ideas

Need inspiration? Our experts are here to help you get started.

ISA charges

Learn more about Stocks and Shares ISAs fees and charges.

Transfer an ISA

It's easy to transfer Stocks ISAs and Cash ISAs to ii.

Junior ISA

A tax-efficient way to invest in your child’s future.