With just a few weeks to go for the current tax year, in contrast, the average cash ISA rate has produced a return of just 1.01% over the same period. The average stocks & shares ISA has delivered growth in eleven of the 18 tax years since the introduction of ISAs in 1999.

New research by Investment Life & Pensions Moneyfacts has revealed the extent to which stocks & shares ISA investors are being “rewarded” for their investment choice.

The research shows that 2016/17 is on course to be the best year for stocks & shares ISA performance since the 2009/10 tax year. The best performing fund sector during the tax year was Japanese Smaller Companies and JPM Natural Resources was the best performing fund, says Moneyfacts.

In the current tax year only 33 out of the 979 ISA funds surveyed (3%) have failed to delivered growth. In terms of Investment Association sectors, the standout ISA performers during the current tax year have been Japanese Smaller Companies (40.1%), North American Smaller Companies (37.3%) and Japan (32.5%), says Moneyfacts.

Richard Eagling, head of pensions and Investments at data provider and publisher Moneyfacts, said: “Despite considerable economic and political uncertainty the 2016/17 tax year has been a very productive period for most stocks and shares ISA funds.

“However, the dominance of cash ISAs over stocks and shares ISAs in terms of popularity means that many individuals will not have benefitted. ISAs have proved to be a phenomenal success since they were introduced almost 18 years ago but whether individuals are making the right choices is questionable.

“Cash ISAs remain the default choice for many investors despite low interest rates. Those reluctant to consider the merits of stocks and shares ISAs may think again if they can see the higher returns that they are potentially missing out from.”