Q: How are investment trust companies managed?

So Annabel Brodie-Smith, communications director of the Association of Investment Companies, said it follows that neither product should be looked at in isolation.

She said: “The AIC has always believed that advisers should look at funds based on their individual merits and according to each investor’s need.

“The fundamental difference though is the stock exchange listing: investment companies are quoted companies in their own right, with their own independent board of directors.

“The extra level of oversight and shareholder accountability that this ultimately ensures cannot be understated, and could be a contributing factor to the sector’s generally stronger performance over the longer-term.

“It also means that fund managers cannot rest on their laurels, something which must surely focus the mind. Indeed, if an investment company board is consistently dis-satisfied with their manager, they can take the management contract elsewhere.”

Edinburgh Investment Trust was cited by Ms Brodie-Smith as a high profile case in point.

Over the last 10 years it has replaced not one, but two fund management groups, before more recently settling on Invesco, where the fund is managed by Neil Woodford.

Despite Mr Woodford’s pedigree, during summer 2011 the investment trust had a total expense ratio of 0.66 per cent.

In fact, Ms Brodie-Smith said nearly a third of the industry has charges of less than 1 per cent, and a number of well known open-ended fund managers have also been quietly managing investment companies alongside their open-ended vehicles.