Open-ended investment company (OEIC)

An open-ended investment company, or OEIC (pronounced 'oik'), is a modern and more flexible version of a unit trust.

An open-ended investment company, or OEIC (pronounced 'oik'), is a modern and more flexible version of a unit trust. It uses the basic structure for collective investments commonly used in Europe and the US. As with unit trusts, the size of the fund is variable - more units or shares can be issued if there is demand for them - and the price of shares or units in the fund is fixed by the value of its underlying assets.

However, instead of having two prices for its shares (one for buying and one for selling), as a traditional unit trust does, an OEIC has one price for both; management fees and commissions are charged separately. This is designed to make it easier for you to see exactly what you are getting. OEICS can be operated as an 'umbrella' structure, which means that, within each, there can be various sub-divisions of funds, each with their own objectives and the ability to invest in different financial products.

This flexible structure makes it cheap and easy for OEICS to keep up with changing consumer demands.

See Ed Bowsher's video tutorial: Why we like investment trusts.

Recommended

Why the FCA should sit back and do nothing for now
Funds

Why the FCA should sit back and do nothing for now

The Financial Conduct Authority has asked for ideas on how to improve the consumer investment market. But perhaps the best thing to do right now would…
21 Sep 2020
Two new funds to invest in the next big disruptive industries
ETFs

Two new funds to invest in the next big disruptive industries

Food and education are two sectors ripe for disruption – and two new ETFs offer the chance to invest.
15 Sep 2020
Don’t be fooled by the illusion of safety in income
Sponsored

Don’t be fooled by the illusion of safety in income

The UK income sector has suffered badly. Max King looks at what the might future look like, and what investors can learn from the experience.
15 Sep 2020
I wish I knew what a tracker fund was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what a tracker fund was, but I’m too embarrassed to ask

Instead of trying to beat the market, tracker funds – also known as “passive” funds – try to track its performance.
2 Sep 2020

Most Popular

Will a second wave of Covid lead to another stockmarket crash?
Stockmarkets

Will a second wave of Covid lead to another stockmarket crash?

Can we expect to see another lockdown like in March, and what will that mean for your money? John Stepek explains.
18 Sep 2020
IAG's share price is ready for take-off - here's how to play it
Trading

IAG's share price is ready for take-off - here's how to play it

The owner of British Airways has had a turbulent year, but is now worth a punt. Matthew Partridge explains the best way to play it.
8 Sep 2020
Here’s why you really should own at least some bitcoin
Bitcoin

Here’s why you really should own at least some bitcoin

While bitcoin is having a quiet year – at least in relative terms – its potential to become the default cash system for the internet is undiminished, …
16 Sep 2020