However, just like unit trusts, smaller investment companies have certain liquidity advantages over their giant rivals and investors who are willing to delve into this under-researched area can find some good buys.
Here we highlight three investment trusts with good prospects and less than £150m assets under management.
Lindsell Train IT
This £47m investment company is headed up by FE Alpha Manager Nick Train who is best known for managing the CF Lindsell Train UK Equity fund in the open-ended universe as well as the £232m Finsbury Growth & Income trust.
Data from FE Analytics shows that Lindsell Train IT tops the AIC Global sector over three years, with returns of 89.63 per cent. It is also top-quartile over one, five and 10 years.
Performance of trust vs sector over 3-yrs
Source: FE Analytics
"Nick Train is best known for his UK fund but Lindsell Train offers something a bit different," said Charles Cade, head of research at investment trust specialist Numis Securities.
"The trust has a sort of absolute return mandate with some fixed interest exposure as well. It has a different risk profile to most other investment trusts."
FE data shows the investment trust is currently trading at a premium of around 1.5 per cent.
Cade commented: "The trust is very illiquid and tends to trade at close to asset value so it could represent a good buy when trading at a discount."
Mid Wynd International IT
The £66m Mid Wynd International IT has been a consistently strong performer over the long-term.
Our data shows that over the last decade it has returned 145.67 per cent compared with 98.96 per cent from the average fund in the Global sector. It is also top quartile over three and five years.
Performance of trust vs sector over 10-yrs
Source: FE Analytics
"The interesting thing about Mid Wynd is that it is now trading at asset value where it tends to trade at a premium," explained Cade.
"Baillie Gifford, who manages the fund, is a highly regarded group in the investment trust universe."
"Manager Michael MacPhee focuses on much less liquid assets than a larger fund like Scottish Mortgage could invest in so the size gives it a certain advantage."
Independent Investment Trust
The £134m Independent Investment Trust has lost 12.8 per cent in the last year, almost double that of the Global sector average but Cade thinks this is creating a value opportunity for investors who believe in the manager’s strategy.
"The recent performance of the trust hasn’t been great but the long-term record is very strong," he said. "Max Ward, who used to manage the Scottish Mortgage Investment Trust, runs the fund with a long-term stock-picking approach."
"The poor performance means that the fund is now trading on a discount where historically it has traded at a premium."
Performance of trust vs sector over 3-yrs
Source: FE Analytics
Our data shows the fund has returned 45.26 per cent over the last three years while the sector has returned 39.29 per cent.