An OEIC is a collective investment scheme known as an open-ended investment company, where investors' money is pooled in one or more sub-funds to buy shares. OEICs are also sometimes called ICVCs - Investment Companies with Variable Capital. Usually each sub-fund will have a different investment objective. Each sub-fund can have a number of classes of share, each representing a proportion of the value of a fund. Each class of share may have different conditions for investments and different charges may apply.
As an investor, you own shares in a fund. An OEIC is "open ended" which means that investments in it do not have a fixed term and may be added to at any time.
OEICs first appeared in the UK in 1997 and since then many unit trusts have changed their structure to become OEICs.
| Advantages of investing via an OEIC |
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You gain several important benefits from pooling your money in an OEIC with other investors:
| Differences between an OEIC and Unit Trust |
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The major practical difference for you as an investor is the way that shares in an OEIC are priced compared to unit trust pricing.
Shares in OEICs have a single price at which all deals take place. New investors also pay a separate initial charge. Unit trusts traditionally are dual priced, which means they quote a buying (or offer) price and a lower selling (or bid) price. The offer price includes an initial charge for new investors. The OEIC's single pricing approach is clearer and makes switching between the funds of an OEIC more straightforward than swapping unit trusts run by the same manager.
To learn more about New Star's OEICs, we recommend that you talk to a financial adviser. Search for your nearest independent financial adviser (IFA) or view our full range of New Star OEICs.