The tide looks unstoppable and yet, according to some investment insiders, more than half the 1,600 different unit trusts could well disappear within the next five years. They will be replaced by a new kind of fund, known as an open-ended investment company or Oeic, pronounced "oik".
The first Oeic opened for business at the end of last month, and plans for the next were announced last week, the climax to some two years of toing and froing between the fund management industry, the Treasury and the Inland Revenue,
The honour of being first past the post to launch one of the new funds was taken by Global Asset Management, (GAM) with a specialist fund, which invests in Japan, while the second to go on sale will be an emerging markets fund from the Templeton investment group.
Although there is not likely to be a flood of new launches over the coming months, many unit trusts are expected to convert to the new structure by the end of the decade, taking advantage of a tax concession which means that, for conversions before that date, there will be no tax liability when the assets of the old unit trust are transferred to the new.
What will all this mean for the average private investor? At first, not a lot, according to Dougie Adams, Templeton's European business planning director.
"The most visible difference will be that Oeics will have just one price, rather than the dual bid/offer pricing structure which we are used to in unit trusts," he said, unveiling details of the new Templeton emerging markets fund. "Customers can relate to it, and they will see that there is no kind of hidden charge. It's going to be good for everyone, the investor and the industry."
But there are some other important differences between old and new which, long term, could have a direct impact on investors.
Oeics are companies, and the investment in them will be shares, rather than units. Just as a trading company can issue ordinary and preference shares, so an Oeic can issue different classes of share.
So, for example, with the new GAM fund, there are A shares, sold directly to investors, and B shares, sold only through intermediaries. The difference lies in the charging structure, with the B shares having a lower initial charge and a higher annual charge.
Although it does not apply to either of the Oeics announced so far, it will even be possible for different share classes to be denominated in different currencies. And that is the key to understanding why the new product is being introduced: it is an attempt to help the UK fund management industry export its expertise.
Pension funds and large corporations from all over the world flock here for investment advice. Retired teachers and other public employees all over the US, for example, depend on fund managers in London and Edinburgh to keep their pensions growing. And of course analysts from Britain can be found keeping an eagle eye on company performance everywhere from Argentina to Uzbekhistan.
But at a retail level, the industry remains largely confined to the UK. For while unit trusts are well-established in this country, they are unknown in the rest of the world.
So, at some stage in the future, we could see a pan-European Oeic with shares available in sterling, marks and lira, so that investors could buy in their own currency or, as a hedge, in another.
The other big difference is that Oeics can be organised as a series of sub funds under a single umbrella and it will be easy for investors to switch between them if their investment needs change or they are unhappy with the performance of a particular sector.