Indeed, the rising popularity of passives has seen larger fund management houses that offer purely active products come up against the growing momentum of providers including Vanguard, ETF Securities and WisdomTree. The ensuing debate, referred to as active versus passive, pits the two types of investing against each other.

Howie Li, head of the Canvas platform at ETF Securities, explains: “Traditional passive investing generally refers to using products that track a market-cap benchmark, such as the FTSE 100 index, and this has been appealing due to its role in providing market exposure at a low cost.

“With active management, investors typically pay higher fees and entrust the manager to provide some sort of added value on top of market-cap investing. Such value may be outperformance [or alpha] over a benchmark, or it could be to minimise volatility or drawdown risk.

“What’s been noticeable in the past few years is that investors are increasingly scrutinising their investment choices to ensure the amount they pay in fees is justified by the ‘value’ they actually receive.”

Investors are increasingly scrutinising their investment choices to ensure the amount they pay in fees is justified by the ‘value’ they actually receive Howie Li, ETF Securities

In March 2016, tracker products attracted net retail sales of £393m, bringing their overall share of industry funds under management to 12.6 per cent, up from 11.4 per cent a year earlier.

For Chris Mellor, executive director, equities product management at Source, the case for allocating to passive funds is particularly strong in an environment where returns are hard to come by.

He says: “The lower fee point becomes even more important in a lower return world and with zero interest rates and low returns on many asset classes.

“I think there’s been some fee compression, even in the active space, but fees have [largely] stayed the same while the returns on investments have shrunk.”

Meanwhile, the fees charged by active managers are coming under ever closer scrutiny – in particular those funds deemed to be closely replicating an index while levying active management fees, also known as closet trackers. The European Securities and Markets Agency found up to 15 per cent of Ucits equity funds may be closet trackers.

Being invested in many global or regional indices at the start of this year would have given investors a bumpy ride though. Mr Mellor acknowledges both an active fund invested in equities and an index fund tracking the MSCI World index, for example, would have experienced some “pretty violent movements” in both directions in the first quarter of 2016.

But he suggests an index fund would have avoided any potential behavioural mistakes that come with discretion.

He says: “There’s always the risk with an active fund that after the market has fallen 10 per cent you take a view that it’s going to go further, and you could move to a more defensive stance, which would have been exactly the wrong thing to do from the middle of February when the market bounced back.”

Simon Midgen, head of index funds strategy at Legal and General Investment Management, adds: “There are some active managers that are able to outperform, but they are fiendishly hard to identify and very few can generate consistent returns over time.”

Ellie Duncan is deputy features editor at Investment Adviser