It's been well discussed in the media and elsewhere that holders of ITs (and individual stocks) tend to outperform OEIC funds after charges. The financial press and the investment industry seem to keep very quiet on why this may be the case.
The large investment platforms e.g. AJ Bell and HL have a fixed cap on their platform charges for holding ETFs, stocks and ITs but no cap for holding funds. This can lead to some pretty large platform fees for significant portfolios holding funds. Clearly this is an important source of revenue and profits for these platforms but the different treatment of ITs and OEICs is odd. Not surprisingly these platforms tend to promote OEIC funds to their clients despite not always being in their clients' best interests.
OEICs also suffer from panicking investors withdrawing funds during market downturns which forces OEIC fund managers to sell holdings into a falling market and results in lack of dry powder at market lows when attractive valuations present opportunities. This might also explain a star fund manager effect - e.g. investors in Fundsmith Equity may have kept the faith with Terry Smith during the last crash and held off withdrawing at the lows but not had so much confidence in lesser fund managers. This can of course reverse after a period of poor performance as we have seen with Woodford.
Funds are also notorious for lack of transparency in their charges, the often quoted AMC and OCF do not include transaction costs or performance fees. The real figure is often significantly higher. ITs are not innocent of this either.
Personally I'm not that happy paying 1% p.a. + transaction fees but will do so to get access to markets where company information is hard to come by. e.g. I hold Jpmorgan Russian Securities (LON:JRS) & Jpmorgan Indian Investment Trust (LON:JII)
