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There are literally hundreds of investment companies listed on the London Stock Exchange, with combined total assets of a whopping £106 billion. So where do you start - and how do you find the right fund for you? The answer, of course, very much depends on your profile. Are you an income investor, or is your focus capital growth? Or maybe it's a combination of the two. And is the right fund for you a 'steady as she goes' type fund, or are you looking for something a little more volatile? The investment company sector houses a diverse range of risk profiles. That aside, here are some pointers to help you along the way:

The track record: Everyone is aware that ‘past performance is no guide to future returns'. But we all like to look at past performance, and consistent strong performance is obviously something of a holy grail. It makes sense to look at past performance over a variety of time periods and also to look at discrete annual past performance, which can give a much clearer picture of how a fund has performed in different market conditions. The AIC's website, www.theaic.co.uk, includes performance data, but also, information on gearing (borrowing), charges, discounts/premiums and portfolio information - all part and parcel of the research process.

Income: The investment company sector has an unrivalled dividend track record because companies have the flexibility to retain some of the income they receive each year and squirrel it away for more difficult times. Known as 'dividend smoothing', it has enabled some companies to increase their dividend through both the good times and the bad. This can be reassuring, even if you're not an income investor. There a significant number of investment companies which have increased their dividends each year for twenty years or longer.

Innovation: The investment company structure lends itself very well to innovation, as the growth of specialist sectors like Debt, Infrastructure, Litigation and Utilities demonstrate. In addition, some companies are using some interesting investment strategies which are difficult to replicate elsewhere like Hedge funds, Private Equity and Venture Capital Trusts. It’s worth keeping apace with industry news via the financial pages, and the AIC also includes company stock exchange announcements on its website in the individual member pages. If you are looking for a company that's a little bit different, the investment company sector houses a good deal of choice and if you prefer, there's plenty of more traditional focussed companies too.

Shareholder communication: Engagement and good communication with shareholders is important and one of the strengths of the investment company structure is that they have an independent board of directors to represent shareholder interests. The independent board constantly review the company objectives and oversee the management of the company. Shareholders can attend the AGM, where they can put questions to the manager and board of directors, and vote on key issues.