Most popular shares for your ISA

As the 2015/16 ISA season draws to a close, we've taken a look at how Interactive Investor clients have been using their annual tax-free allowance. There are some very familiar names, and the majority look like sensible investments.

With just six trading days left of this tax year, collective investments like funds make up 57% of the assets held in ISAs by Interactive Investor clients. UK and overseas equities make up just over 32%, cash 9.6% and bonds 1%.

But which equities have users been buying?

Unsurprisingly, high street bank Lloyds tops the list of shares held by value in ISAs. Drugs colossus GlaxoSmithkline has proved popular too, as has oil major Royal Dutch Shell in third place. National Grid, the power transmission network company, and BP make up the five.

In terms of the most popular net traded stocks - buys minus sells - Shell has been the most-heavily bought share since 6 April 2015. Lloyds, Glaxo and BP are close behind. Far-East-focused lender HSBC brings up the rear.

This disparate bunch has a few things in common. Apart from being exclusively blue chip, they each offer stunning dividend yields. According to Sharepad data, Glaxo yields 5.8%, Shell 7.2%, BP 7.4%, HSBC 8.3% and National Grid 4.5%.

Grid's yield may lag the others, but its shares are by far the best performers this tax year, surging by 12% compared with a 9% decline for the FTSE All-Share index.

However, over the past six weeks, it's Lloyds which takes the crown. Having sunk to a low of 56p last month, the shares are up 22% since, and canny investors will have been snapping up stock at a discount of over 20% to the retail offer - currently on hold while markets cool down - likely priced at around 73p.

Lloyds' return to the dividend list has clearly got investors excited, too. On Barclays' estimates, the high street lender will return 6p a share to shareholders in 2016, giving a prospective yield of well over 8%. There is some debate over the likelihood of such a bumper payout, but even on an historic basis the shares yield 4%.

"With an attractive outlook for returns and capital return we continue to expect the shares to outperform on a 12-month view and stay 'overweight' with a 95p price target," says Barclays analyst Rohith Chandra-Rajan.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.