The investment platform found that the average global investment trust has outperformed its fund equivalent by 0.95% a year over the past 10 years, and by 2.62% per year over the past 20 years.

In fact, investment trusts had, on average, outperformed their equivalent fund sectors over 10 and 20 years on an annualised basis in almost every single sector that Interactive Investor looked at.

The UK Equity Income sector has seen investment trusts outperform funds by an average of 1.79% per year over 10 years and 1.5% per year over 20 years.

Investment trusts in the European Smaller Companies sector have outperformed funds by 3.7% a year over 10 years and 2.43% over 20 years.

The UK Smaller companies sector is an exception – on average funds have outperformed trusts on an annualised basis by 2.35% a year over 10 years, and 0.58% a year over 20 years.

What are investment trusts and investment funds?

Investment trusts are public companies that seek to make money for their shareholders by buying and selling shares in other companies or assets. They are run by professional fund managers.

With an investment fund, investors pool their money together and a professional fund manager invests the money in assets such as shares, bonds, property, cash, or a combination.

The Interactive Investor findings come as the clock starts to tick louder on the ISA deadline.

According to the Association of Investment Companies (AIC), fewer than 10% of financial advisers recommend investment trusts regularly, with funds still having a considerably higher profile.

Dzmitry Lipski, head of funds research at Interactive Investor, said: “Even carving out an extra half a per cent a year is impressive enough year on year, and many investment trust sectors have outperformed funds by considerably more. But while thought provoking, these are just averages – like every other sector, the investment trust sector has its winners and losers. And sometimes, the bigger the rise, the bigger the potential fall.

“Investment trusts do have some structural features that help them outperform over the long term, such as the ability to gear to enhance returns, and a closed ended structure that means they can take a long-term view without having to sell stock to meet potential redemptions. But their ability to gear to enhance returns also means they can be considerably more volatile in falling markets.

“Another important consideration is investment trust discounts, which have narrowed considerably over the last 10 and 20 years. Wide discounts mean you get more capital and income working for you to produce long term returns, but for new investors buying today, that opportunity has vanished – at least for now. The early days of the pandemic last year did see investment trust discounts, on average, return to the high teens – but not for long.”