Edinburgh Small Companies, the investment trust run by Standard Life Investments' top-performing manager Harry Nimmo, has beaten its benchmark again The trust, forced to halve in size in November following an attack by Isle of Man-based arbitrage fund Laxey Partners, added 22.4% to net asset value in the six months to December 31, against an 18.7% rise in the benchmark.

Over three years the trust is up almost 115% against 90% for the small company index.

Chairman Donald MacDonald said the board was encouraged that SLI had "now incentivised their sales force to sell investment trusts on a similar basis to their success-ful range of open-ended investment companies".

Gordon Humphries, SLI's head of investment trusts, confirmed that the group had only recently introduced common incentives for the in-house sales force, which targeted wealth managers. He commented: "It is important because if they have got a good product, but they are not going to be incentivised, you may not get the sales."

MacDonald said the restructuring had brought in a number of new shareholders while others had increased their investment. "The trust now has a more diversified and less-concentrated shareholder base," he said.

As part of restructuring the trust redeemed a proportionate part of its 2023 debenture stock early at a cost of £137 per £100 of nominal value.

SLI has discretion to take the trust's net gearing as high as 20%, and over the period gearing ranged from nil to 12%, where it stood at the end of 2006.

Following the tender offer which saw 48.4% of the shares bought back, the trust has introduced a discount management policy which aims to limit the discount to a tight 5%.

MacDonald said: "The trust continues to benefit from the manager's disciplined investment process and positive stock selection."

He said small company valuations were now less compelling but the investment case was still strong.

Daniel Godfrey, director-general of the Association of Investment Companies, commented that independent advisers would also be attracted towards investment trusts as the distorting effects of commission bias started to disappear.

"In the medium term, increasingly advisers will be doing business through wrap products, which will enable them to earn their living from the front end, directly from the client, rather than from commission paid by the manager. That will level the playing-field very significantly."

l Murray Income investment trust posted a net asset value return of 11.4% and a shareholder total return of 12.5% in the second half of 2006, beating an all-share index benchmark rise of 10.

The trust run by Aberdeen Asset Management said that during the period it had bought Tomkins, Wolseley, Premier Foods and a small stake in Venture Production, the North Sea explorer, in replacing stocks such as BAA on its sale to Ferrovial.