“Advisers are shifting huge numbers of clients into multi-asset funds and model portfolios (directly or through discretionary fund managers). It’s not the open architecture market that investment trusts arguably need to thrive.”

Adviser misconceptions

Some of the barriers come from the advice sector itself – a belief in some quarters that trusts, with their fluctuating share prices as well as net asset values, are confusing for clients. 

But it is difficult to lend weight to such an argument considering DIY investors were the biggest buyers of the vehicles between 2012 and 2017, according to a study by Aberdeen Standard Investments. 

That paper found direct-to-consumer platforms such as Hargreaves Lansdown were dominant buyers, and that advisers were not recommending investment trusts to a “meaningful degree”.

Concerns about client confusion, alongside the idea that trusts are risky because of gearing, are arguably becoming outdated. 

The products certainly have benefits over their open-ended peers in the form of better governance, the ability to outperform when gearing is used correctly, better management of illiquid and niche asset classes, and a better ability to provide consistent and reliable income. In addition, the ability to buy trusts at a discount offers an ability to compound returns.

Mr Dowling agrees that saying trusts are too complex does not wash any more. 

He warns: “Advisers who refuse to countenance investment trusts, except as a means to access specialist markets, should be worried; they risk marginalising themselves and becoming irrelevant. 

“Advisers who aren’t engaged with investment trusts need to get a grip.”