No matter the goal, closed funds have their merits.

But most insurers have millions of policies in closed funds on their books, with varying consequences for customers.

Closed funds can attract negative coverage, as in the case of Resolution plc.

Of course, many closed funds are still available to investors through their retirement plans or their financial advisers.

A second option is to buy funds that are strikingly similar to closed funds.

So it's hardly surprising that some previously closed funds are rolling out the welcome mat again.

Most of the closed funds grew by only 3pc with the worst, Colonial Life, achieving less than 2pc annual growth.

And some closed funds mirror open-end mutual funds - except for the discounts.

But closed funds can be dangerous.

Mr Waller said: "Closed funds are not automatically bad news.

To tap investors' eagerness to own shares in funds they can't get, the industry has been producing clones of the closed funds.

Mr. Madlem has fused the two variables of closed funds - share price and net asset value - into one rule.

And, thanks to rising interest rates and year-end selling for tax purposes, discounts in the 535 closed funds are as common as Christmas trees.

Charles Royce, Barton Biggs and other open-fund managers also tend closed funds.

Investors who really want into the closed fund, however, will find that an older fund, Seligman Henderson Global Technology, is a more likely substitute.

In some cases, closed funds will at some point merge with other life insurance funds, or be transferred to another company, in order to achieve economies of scale.

Many financial services companies have been involved in packaging a collection of similar instruments, such as municipal bonds, into closed funds that were sold as both preferred and common shares.

The study, said John Rekenthaler, editor of Morningstar Mutual Funds, provides only "mild evidence in support of the thesis that closed funds are better investments."

A Zombie Fund (more formally known as a closed fund) is a colloquial expression for a with-profits life insurance fund which is closed to new business.

A Newborn Cousin For a Closed Fund Once a fund closes, the fund company often introduces a new alternative for shut-out investors.

Morningstar has prepared a list of clones for prominent closed funds, except for two that they consider without reasonable facsimiles: Acorn Fund and FPA Paramount.

Like many trapped in closed funds, they have not only watched their investments change hands, in some cases several times, but with each spin of the money merry-go-round, their performance has collapsed.

Funds that do not report returns anymore (closed funds, liquidated funds for example) formed the TASS Graveyard database, which contains over 6000 funds.

The trend may well accelerate, but there are two ways to circumvent the limits: buy shares from other investors rather than from the fund itself or invest in "clones" of the closed funds.

But while the latter issue an unlimited number of shares priced at the portfolio's net asset value, closed funds issue finite shares that often trade at premiums or discounts to that value.