Prompted by a succession of readers’ requests, a few months ago I ran the rule over a number of leading fund managers and their UK equity-focused unit trusts.

While each manager’s promotional literature sought to out-do the other with a particular genre of flowery, often opaque language which suggested their respective PR companies had swallowed a thesaurus, in truth, they and their holdings were remarkably similar.

The majority of UK equity fund holdings have, of necessity, substantial stakes in the FTSE’s highest-profile companies and have done for years.

Such a strategy is laudable, but my argument some months back was, ‘why pay a fund manager five per cent commission up front and 1.5 per cent a year to buy shares in perhaps a dozen companies, the identity of which rarely changes?’ Surely it’s easier to buy the shares yourself?

Moreover, while a UK equity fund manager’s holdings in the top companies will rarely change, the industry has attracted plenty of criticism for constantly ‘churning’ their other holdings, a costly exercise for which investors pay. I should say that on the whole, most fund managers endeavour to beat the market on investors’ behalf, but success is often sketchy and, as a consequence, in recent years, this rather sedentary industry has been targeted by firms who believe they can do better.

The success of low-cost US tracker funds is well documented and earlier this month, a new type of unit trust, with an accomplished British investor at the helm, was launched with, it seems, the specific intent of shaking things up a little further.

Terry Smith gained an excellent reputation as a banking analyst in the 1980s, before leading a management buyout (and subsequent float) of Collins Stewart a decade ago.

He managed the firm’s pension fund from December 2003, and reckons it returned 13 per cent a year after costs. Now, with £25m of his own money, he’s launched his own fund (the Fundsmith Equity fund), the aim of which is to become “the best fund you have ever owned.”

His investment logic and approach is encouraging.

For starters, there’s no glossy brochure.

“At Fundsmith we want you to have an owner’s manual . . . because your understanding of what we’re trying to achieve . . . . is a critical element in enabling us to attain our goal,” says the fund’s blurb.

An ‘owner’s manual’ has a much earthier feel to it than the usual costly brochure outlining commissions, performance fees and other costs which I suspect most investors do not understand.

Smith’s fund scores here too: he promises no performance fees, no initial fees, no redemption fees and, significantly, no overtrading.

He plans a buy-and-hold strategy in no more than 20 high quality businesses and is not too hung up on descriptions of whether it’s a growth or an income fund: “We regard this distinction as artificial,” Fundsmith’s literature declares.

Fundsmith will levy an annual charge of one per cent for people who invest directly into the fund, another attractive feature which, coupled with Smith’s reputation, and his willingness to give the managed fund industry a solid rap around the shins, should result in it gaining an enthusiastic following.