How I generated a 23% return across my ISA and SIPP in 2023 (and my strategy for 2024)

Edward Sheldon managed to achieve double-digit returns across his ISA and SIPP last year. Here, he explains how and reveals his approach for 2024.

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The words "what's your plan for retirement" written on chalkboard on pavement somewhere in London

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

In 2023, I generated a return of around 23% across my Stocks and Shares ISA and Self-Invested Personal Pension (SIPP) accounts. All things considered, I’m pretty happy with that performance (the UK’s FTSE 100 index delivered a total return of just 7.9% last year).

Here, I’ll discuss how I achieved that double-digit return. I’ll also reveal my investment strategy for 2024.

A focus on technology

The healthy returns across my ISA and SIPP in 2023 can be attributed to strong performances from the mega-cap technology stocks, which I have a fair bit of exposure to.

Passive income stocks: our picks

Do you like the idea of dividend income?

The prospect of investing in a company just once, then sitting back and watching as it potentially pays a dividend out over and over?

If you’re excited by the thought of regular passive income payments, as well as the potential for significant growth on your initial investment…

Then we think you’ll want to see this report inside Motley Fool Share Advisor — ‘5 Essential Stocks For Passive Income Seekers’.

What’s more, today we’re giving away one of these stock picks, absolutely free!

Get your free passive income stock pick

At the start of 2023, Alphabet, Microsoft, and Apple were my three largest individual stock holdings while Amazon was my sixth largest.

These stocks all produced phenomenal returns for the year (as the table below shows), boosting the value of my portfolio significantly.

StockShare price gain in 2023
Alphabet58%
Microsoft56%
Apple49%
Amazon81%

Other technology stocks also did well for me. For example, at the start of 2023, I had a decent-sized holding in chip designer Nvidia. It rose 239% for the year on the back of its success in the artificial intelligence (AI) space.

Created with Highcharts 11.4.3Nvidia PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.co.uk

Shopify, Lam Research, and FTSE 100 company Sage are some other stocks worth highlighting. These stocks gained 123%, 86%, 56% respectively in 2023.

Investment funds I hold also generated strong returns. For example, the Blue Whale Growth fund posted a return of 30% for the year. Meanwhile, the Sanlam Global Artificial Intelligence fund returned a little over 30%.

There are a couple of takeaways here. One is that it can pay to take a global approach to investing. Most of my best performers last year were outside the UK (although I did have some good performing UK stocks). So international diversification really paid off.

Another is that it pays to back big themes (AI, cloud computing, etc) and take a long-term approach to investing.

Many of the stocks I’ve mentioned above had a poor year in 2022. However, instead of selling out of them at low prices, I bought more because I was confident in the long-term growth story. So when the market recovered, my portfolio did really well.

My strategy for 2024

As for my strategy this year, I’m not changing a lot. At the start of 2024, my top 10 individual stock holdings were:

My top 10 stock holdingsMarket
MicrosoftUS
AlphabetUS
AmazonUS
AppleUS
MastercardUS
VisaUS
NvidiaUS
DiageoUK
SageUK
Smith & NephewUK

One thing I will be doing in 2024 however, is boosting my exposure to areas of the market outside technology just to diversify my portfolio a bit more.

I’d like to own more healthcare stocks. Recently, I have been investing in the Schroders Global Healthcare fund to increase my exposure here.

I’m also looking to build my positions in some smaller holdings to ensure my portfolio is more balanced. Some names I want to boost here include London Stock Exchange Group, Uber Technologies, and InterContinental Hotels.

Additionally, I plan to add to smaller companies that have been beaten up (I think there are some great opportunities in UK small-caps).

As always, I’ll be drip-feeding money into my ISA and SIPP and investing the capital on a regular basis.

However, if we see a decent pullback in the market, I will be buying more aggressively.

This AI stock is becoming a digital juggernaut in a £ 12.5 billion market!

🤖 Curious about the next big player in AI? 🤖

Our leading industry analysts have uncovered a trailblazing content platform that's revolutionising the industry with its unparalleled generative AI technology, setting new standards in creativity and efficiency.

Care for a sneak peek?

Trusted by global giants like Amazon, Disney, and Netflix, this innovative company is not just transforming digital media with AI-generated 3D content but is also capturing a significant share of a £12.7 billion market!

With a remarkable 62% gross margin, indicating exceptional profitability and operational efficiency, this company's growth trajectory positions it as a must-watch for savvy investors.

Best of all, we're offering exclusive access to the name of this game-changing stock, absolutely free!

Discover your free AI stock pick

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Ed Sheldon has positions in Alphabet, Amazon, Apple, Diageo Plc, InterContinental Hotels Group Plc, Lam Research, London Stock Exchange Group Plc, Mastercard, Microsoft, Nvidia, Sage Group Plc, Shopify, Smith & Nephew Plc, Uber Technologies, Visa, Blue Whale Growth, Schroders Global Healthcare, and Sanlam Global Artificial Intelligence. The Motley Fool UK has recommended Alphabet, Amazon, Apple, Diageo Plc, InterContinental Hotels Group Plc, Lam Research, Mastercard, Microsoft, Nvidia, Sage Group Plc, Shopify, Smith & Nephew Plc, Uber Technologies, and Visa. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Young mixed-race couple sat on the beach looking out over the sea
Investing Articles

FTSE shares: the perfect ‘get rich slow’ idea?

As a long-term investor, Christopher Ruane reckons the FTSE 100 could offer him the foundations to create stock market wealth.…

Read more »

Investing Articles

Here’s how an investor in their 30s could aim to turn a £10k ISA into £132,676 by retirement

Christopher Ruane explains how someone with a 30-year investing timeframe could aim to increase an ISA stuffed with blue-chip shares…

Read more »

Investing Articles

£10,000 invested in Rolls-Royce shares 5 years ago is now worth…

Rolls-Royce shares have made a lot of investors very rich as they push to new heights. Dr James Fox explores…

Read more »

Investing Articles

£20k split between these 2 FTSE value stocks 1 month ago is now worth…

Harvey Jones has had his eye on two value stocks from the FTSE 100. Suddenly they've both taken off at…

Read more »

Investing Articles

Gold’s hit record highs – and these former penny shares have soared over 115%!

After gold recently hit record highs, it may be no surprise that two former penny shares focused on the yellow…

Read more »

Investing Articles

£20k in a Stocks and Shares ISA? Here’s how to target passive income of £633 a month

Christopher Ruane explains how an investor could turn a Stocks and Shares ISA into a passive income goldmine with a…

Read more »

Passive and Active: text from letters of the wooden alphabet on a green chalk board
Investing Articles

How much passive income could I earn from dividends by investing £5,000 a year in the UK stock market?

When starting out it's often the first thing investors ask: how much passive income can I earn? Mark Hartley attempts…

Read more »

Young woman holding up three fingers
Investing Articles

3 steps to start investing with under £300

Christopher Ruane walks through a trio of steps that someone who wants to start investing with just a few hundred…

Read more »