Beard, who is director of closed-end fund research at Morningstar UK, said in a survey of 533 private investors approximately half considered discount as an important part of their decision, while the other half did not.
In the same survey two-thirds of respondents said gearing was of no or little importance.
"We agree that the discount can play a key role in some investment decisions, but that doesn’t mean it has to be a deterrent," said Beard, "It seems investors are less fearful of gearing than is oft-perceived to be the case too."
Less than 25% of investors surveyed saw the need for a formal discount control mechanism as important, which could explain why Laxey Partners’ recent attempts to implement such a mechanism at Alliance Trust were voted down.
"We think clear guidance on the board’s discount policy and when/how it will act – with demonstrable evidence – has as much value as a formal target discount level, if not more," Beard said.
On gearing she added: "It may be simply that closed-end fund investors recognise gearing as a benefit of the legal structure which has added value over the long term when used well."
In terms of what attracted investors to investment trusts, over half cited regular dividend flow as important to them, with only 15% saying this had little or no importance.
The revenue reserve account, which enables investment trusts to hold back revenue in good years in order to maintain dividends in lean years is an important aspect of the fund structure which makes closed-end funds attractive to income seekers.
Similarly, half of investors used investment trusts to access more esoteric asset classes such as property or private equity.
"We’re encouraged by this as we think these are areas in which the closed-end fund structure works well for investors. In a post-RDR world, we think advisers are more likely to recommend these types of funds than some of the generalist equity funds as they offer something a little different that isn’t easily accessible elsewhere," Beard concluded.
