OEIC

OEIC stands for an open-ended investment company which works in a very similar way to a unit trust except that an OEIC is legally constituted as a limited company (Plc). OEICS have been operating outside the UK for some time but only since May 1997 has it been possible to operate an OEIC in the UK.

OEICS are not trusts and do not therefore have a trustee. However they have a depositary which holds the securities and has similar duties to a unit trust trustee.

Most OEICS allow a range of funds to be placed within the investment product. As with all the investments we recommend a diverse range of funds be placed within the investment. Each fund placed within the OEIC will have different investment aims, e.g. a fund may specialise in the shares of small companies or in a particular country, e.g. the USA or UK. Most OEICS only have one unit price and the initial charge is added as an extra. Unit trusts always have two prices, the lower or bid price is what you get when you sell back to the managers; the higher or offer price is what you have to pay when you buy.

By being "open ended", OEICs have no time limit minimum or maximum as to how long you can invest, although we recommend that you should intend to invest into an OEIC for at least five years.
You can invest into an OEIC through an ISA (Individual Savings Account). Each time you invest in an OEIC fund, you will be allocated a number of shares.