Last year was a good one for investment trusts, according to the Association of Investment Trust Companies (AITC).
The average AITC member conventional investment trust increased by 13 per cent.
Communications director at AITC, Annabel Brodie-Smith, said 2004 was particularly rewarding for those who invested in the smaller companies sectors.
The average UK smaller companies investment trust was up 31 per cent.
Ms Brodie-Smith remarked: "In a rising market, investment trusts often outperform due to the freedom they have to use gearing to enhance returns.
"If markets are rising and performance is good, returns to investors will be greater. However if performance is poor, then losses will also be enhanced, so it is important investors understand the potential risks and rewards."
She reminded investors to try to maintain a balanced portfolio to help ease the problem areas.
The best performing investment trust was Trust of Property Shares.
Brewing and pub companies also had a strong year, helping to boost Taverners Trust PLC. It was up 48 per cent, a rise which may have been influenced by recent government plans to reform licensing laws.
Trusts based on smaller firms also performed well, with the European Smaller Companies and UK Smaller Companies sectors both up 31 per cent over the year.
The European Smaller Companies sector was also the second top performing sector over ten years.