Open Ended Investment Companies (OEICs)
Investments
What is an OEIC?
An OEIC is very similar to a unit trust, in that the investors' funds are pooled together
in order to spread risk and utilise the expertise of professional fund managers. They are
generally regarded as being more modern and flexible than unit trusts since they have
several more modern features which unit trusts lack:
- OEICs are regulated by the FSA, and the rules are based on specifically written company law, whereas unit trusts are based on much older trust laws.
- OEICs have a single price for buyers and sellers, whereas unit trusts have a "bid/offer spread", meaning that the buying and selling price are separate.
The share price of the OEIC directly reflects the share price of the underlying assets of the portfolio, and the investment has an umbrella fund structure, meaning there are different classes of share, which can each be invested in a different area if required.