Fund management companies are desperate to get their hands on your annual Individual Savings Account allowance, but how do you know the funds that are worth backing with your hard-earning savings and those that are best avoided?
To help you decide, we have quizzed a panel of leading financial advisers and commentators on where they have invested their ISA allowances in recent years and what regions they believe may deliver the best returns going forward.
Patrick Connolly, head of communications at AWD Chase de Vere
Mr Connolly split his allowance this year between the M&G Global Basics and Schroder Income funds.
"I believe there is particularly good value in value stocks – typically strong and secure companies making profits and paying dividends – which is where the Schroder fund invests," he explains.
"While there is no denying the economic growth in emerging markets and the fact some regions have become quite expensive, the M&G fund aims to invest in Western companies, which are often cheaper but still stand to benefit from emerging market growth."
Mr Connolly deliberately avoids the latest "flavour of the month" funds, and is particularly wary of areas that have either already performed extremely well or which are attracting a lot of interest from people.
"There is no reliable 'get rich quick' investment approach, and the best strategy is to try and achieve consistent and steady long-term returns," he says. "This is why I still hold fixed interest and property within my ISA, even though I believe equities have the potential to outperform."
As far as next year's allocation is concerned, Patrick is yet to make a final decision, although he still favours exposure to Western companies that are likely to benefit from global economic growth.
"This means that I will once again consider investing in M&G Global Basics, as well as funds such as Neptune US Opportunities, Ignis Argonaut European Alpha and Psigma Income," he adds.
Andy Gadd, head of research at Lighthouse Group
Not only did Mr Gadd choose M&G Recovery Fund in the current year, but he also intends putting next year's ISA allocation in it. There are a number of factors influencing his decision, such as the excellent track record that its manager, Tom Dobell, has of purchasing unloved companies that increase in value over time.
"As I have 20 years before retiring I am using my ISA as part of my overall retirement planning strategy, which means I am prepared to invest in a higher risk fund for potentially higher returns over the long term," he explains. "Secondly, I am investing monthly and am expecting to benefit from 'pound cost averaging' as the price of the M&G Fund rises and falls over time."
Mr Gadd, who considers risk, tax efficiency and access when he's deciding where to put his money, believes that UK equities have the potential to rally significantly over the coming year. He points out that thanks to the restructuring that companies engaged in during the early stages of the recession, corporate profits were up around 50 per cent in 2010, which he doesn't believe has yet been reflected in share valuations.
Elsewhere, he believes that even though there will undoubtedly continue to be a certain level of defaults within high yield bonds, investors should be more than compensated for this by the yields on offer.
Justin Modray, founder of the website Candid Money
When Mr Modray is deciding where to allocate his annual ISA allowance he will consider whether he can afford to lose all his money – and how long it will be before he needs to get his hands on the money.
"I also look at whether it will fit in with my existing investments and how best to get access to it," he adds. "For example, I'll consider whether the purchase will leave me overexposed to certain areas or sectors."
At the moment he likes commodities and emerging markets over the longer term, but already has plenty of exposure to thosewithin his pension.
"I'm also quite nervous about markets shorter term and so have split my ISA between cash and topping up existing holdings in Schroder Income Maximiser and Invesco Perpetual High Income," he says. "Dividends look attractive and could be welcome if markets fall."
Mr Modray is nervous that there could be a lot of bad economic news to come which will adversely impact upon stock markets in the short term, particularly in the West. However, he believes that the longer-term prospects for emerging markets are excellent, just as long as investors are prepared to be involved in them for at least 10 years.
"Interest rates are also bound to rise at some stage, which could hurt gilts and corporate bonds, but over the shorter term they should be fine, as many investors continue to use fixed interest as a safe haven, especially if inflation falls back."
Geoff Penrice, an independent financial adviser with Honister Partners
Mr Penrice invested this year in the M&G Managed Growth fund and hasn't ruled out a similar move during the next financial year.
"It is a 'fund of funds' which invests primarily in M&G funds, with the main three funds being M&G Global Growth, M&G Global Growth and their Recovery Fund," he explains. "Graham French, who runs the fund, has had a fantastic track record."
He particularly likes the fact that the fund appears to be looking at how best to benefit from the way the developing economies are dominating global economic growth. As a result only around 20 per cent of the fund is invested in the UK.
As far as his own holdings are concerned, Mr Penrice looks for fund managers with consistently good track records. "I am drawn to those that have conviction in their own ideas and don't just follow the herd," he adds. "I am not particularly concerned by charges as performance is much more important than cost. Often the top funds do charge more, but I am happy as long as they have good performance net of charges."
The medium- to long-term trends will continue to be driven by the rise of the developing economies, he suggests, but adds that it remains very important to look at the valuations to make sure you invest at fair value.
"The United States looks to be recovering strongly despite the remaining debt issues," he adds. "The M&G Managed Growth fund currently has its largest holding in American shares."
Darius McDermott, managing director of Chelsea Financial Services
Mr McDermott split his ISA allocation in the current year between the Henderson Global Technology fund and the Investec Global Gold fund.
"These are two high-risk sector investments that I have had for about eight months and so far I'm happy with them," he says. "Generally I make ISA investments on a monthly basis and then top it up at tactical points when the market is weak."
So what did he like about these areas?
"A decade ago it was all blue-sky technology but there are now big companies in this area," he says. "They're all cash generative companies and I was looking to make an investment in a diversified area that also comes with exposure to the US."
The other half of his ISA allocation went into gold because he was concerned about inflation. "The fund I buy invests in gold miners so you get operational leverage," he adds. "If the gold price goes up a bit then the miners should go up more as well."
At the moment he is alsointerested in putting money intoUS funds. "The US is unloved but looks to have turned a corner," he says. "Stock markets have had a very decent run over the last six months and I can see that if global markets stay strong then this will be one of the better markets to have."
Making your choice
Deciding where to place your annual allowance will depend on a number of factors, such as whether you have earmarked the cash for a particular purpose, your attitude to risk, and the areas of the world that you expect to deliver the best returns.
Up to half the allocation can be held in a Cash ISA, while the entire amount can be put in a Stocks & Shares ISA. As you can invest £10,200 in the current tax year, this means that up to £5,100 can be held in a Cash ISA.
According to Justin Modray, founder of the website Candid Money, those who can afford to tie their money up for at least five to 10 years should acknowledge that a Stocks & Shares ISA is likely to deliver higher returns over this period than cash.
"However, if they can't afford to risk the money and face the prospect of sleepless nights, then they should stick to cash," he adds. "Basic rate taxpayers are also likely to derive more tax benefit from holding interest paying investments such as cash and corporate bonds, although they shouldn't let tax dictate how they invest."