The latest figures from the Association of Investment Companies (AIC) reveal that overall industry assets had reached an all-time high of £115bn by the end of June this year, while the average discount has dropped to a record low of 3.3 per cent.

Ian Sayers, director-general of the AIC, points to a strong initial public offering market as well as the historically low discounts and industry assets as signs the sector is going “from strength to strength”.

Mr Sayers notes: “Clearly good long-term performance, demand for income and the RDR have all contributed to increased demand for investment companies.

“It’s also encouraging to see the scale and pace of change we have seen when it comes to investment companies reducing their fees and remaining competitive in a post-RDR world.”

The closed-ended sector is renowned for its longevity, with 26 current AIC member companies established before 1914. Of those, 10 have also consecutively increased their dividends for at least 30 years.

Simon Cordery, head of investor relations for investment trusts at F&C Investments, hails the sector’s “good health”.

He continues: “Given that the majority of the sector is equity based and the fact that we’ve had five years of very strong rising markets, it’s not a major surprise that equity-based investments have done rather well and the general attitude of investors towards risk assets has improved over that period. It all adds up to narrow discounts, good sector health and share issuance.”

Mr Cordery acknowledges that the advent of the RDR will have “played a part” but he admits it is difficult to say whether it was the catalyst.

“But I think incremental demand is always good for the sector,” he adds. “I’ve been concentrating on investment trusts solely for the past 15 years and I think this is the best the sector has looked for a very long time.”

There was an expectation among the investment trust industry that the RDR would level the playing field overnight, but its effects have in fact been more gradual. However, the reforms have served to raise the profile of the sector, observes Mr Cordery.

“The education process that the industry is undertaking at the moment, with the AIC and management companies going out talking to advisers more actively about investment trusts, I think that’s a really good sign, but it’s going to take quite a long time for them to put investment trusts first – if ever that happens.”

Ben Willis, head of research at Whitechurch Securities, suggests the RDR has not been “the great new dawn” that was envisaged by some.

He explains: “Of course, the big attractions of investment trusts (ITs) are the discount and the gearing, as these can provide accelerated returns over the long term. This is what marks ITs out and ensures that they continue to remain supported in the investment world.

“Indeed, these unique features are reasons why we continue to invest in ITs for our clients.”

But he argues that the closed-ended structure, the discount mechanism, and the ability to gear also adds layers of complexity that can end up deterring investors.

“This means the apparent simplicity of unit trusts or open-ended funds makes them easier to understand and therefore easier to sell or recommend,” he concludes.

In spite of the introduction of the RDR, it is likely that for the foreseeable future any pick-up in activity in the investment trusts sector will remain slow and steady.

Ellie Duncan is deputy features editor at Investment Adviser