OEICs

Open-ended investment companies (abbreviated to OEIC) or investment companies with variable capital (or ICVC) are often referred to as the modern day and flexible equivalent of the unit trust.

OEICs

What is an OEIC?

Open-ended investment companies (abbreviated to OEIC) or investment companies with variable capital (or ICVC) are often referred to as the modern day and flexible equivalent of the unit trust.

They are a form of open-ended collective investment formed as a corporation under the Open-Ended Investment Company Regulations 2001 in the United Kingdom.

A collective investment scheme is a way of investing money alongside other investors as an umbrella fund structure in order to benefit from the inherent advantages of working as part of a group.

By using investment management for small investors. There are different classes of share and each sub share fund can be invested in a different area if required. This helps to spread the risk and enables you to take advantage of the skills of a professional managing the fund.

In the UK OEICs is the preferred legal form of new open-ended investment over the older unit trust.

OEICs usually have a single price for both buyers and sellers but can be dual priced. Their charges are shown separately. Unit trusts usually have separate buying and selling prices (bid/offer) but can be single priced.'

As an open-ended company the manager must create shares when money is invested and redeem shares as requested by shareholders.

The OEIC share price directly reflects the underlying assets of the portfolio.

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