Here are the top five ISA sectors:

Oil and gas

Unsurprisingly, the most popular sector, based on the number of purchases within ISAs over a two year period, was the oil and gas sector. However, the cyclicality of the oil and gas industry is not a new concern for investors and it’s likely that the giants of the sector will ride though the weakness, albeit with lower earnings and possible asset write-downs. The longer term view associated with these stocks, and subsequently the sector, is likely to be one of the reasons investors have not been put off.

Mining

This has been a troubled sector over recent years with companies facing many headwinds. In general we have seen commodity prices fall as they experience the knock-on effects of the eurozone crisis and a slowdown in key emerging markets such as China and Brazil. However, rising populations, urbanisation and consumerism in emerging nations, underpins the long term support for a whole range of commodities. Many of the companies in the sector are focused mostly on growth although the larger groups have historically paid a good dividend, which is likely to be behind the sector’s popularity. In general, the industry is more suitable for contrarian investors willing to accept a higher level of risk and hoping for longer term recovery.

General financials

This sector provides a wide range of often specialist financial services. The focus among the leading groups is on fund management, stock broking and trading. Although the nature of the businesses can in some cases be a little difficult to understand, the majority of the UK population will have some exposure either directly or indirectly to areas that these companies are involved in – most obviously via management of pensions. It’s therefore unsurprising that the sector features on the most popular sector list.

Banking 

This sector remains in the spotlight as it continues to repair reputational damage suffered since 2008. We believe there are two schools of thought among sector commentators in regards to the industry. One is to remain on the side-lines for the time being, while others suggest that much of the bad news is now reflected in the price of the shares and that long term value exists. The latter view might explain why it’s featuring on the most popular list. We also can’t forget that in 2015, the Chancellor announced plans to sell off the government’s final stake in Lloyds Banking Group – a further reason why the sector may be at the forefront of investors’ minds.

Travel and leisure 

Some stocks have been hit by the effects of terrorist attacks in a number of countries, but demand has bounced back in most cases. Market sentiment towards the sector has improved over the analysed period thanks to the recovery in the underlying UK economy and rising disposable incomes. The fall in the oil price has also helped to reduce fuel costs for cruise ship and airline operators, with some of the benefit passed on in the form of lower ticket prices. Consumers have therefore been keen to benefit.

Ian Forrest is an investment research analyst at The Share Centre