A SICAV is a collective investment scheme common in Western Europe (especially Luxembourg), where investors’ money is pooled together in one or more funds and invested in shares and bonds, for example. Each investor owns shares in a fund, the value of which depends on the value of assets owned by that fund. All funds have a number of share classes, each representing a proportion of the value of a fund. Each class may have different conditions for investments and different charges may apply. A SICAV is ‘open-ended’, which means that investments in it do not have a fixed term and may be added to at any time.
SICAV is an acronym for Société d'investissement à capital variable, which can be translated as Investment Company with Variable Capital. Both a SICAV and a UK Open-ended investment company (OEIC) share similar characteristics.
| Advantages of investing via a SICAV |
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You gain several important benefits from pooling your money in a SICAV with other investors:
| Differences between a SICAV and an OEIC or Unit Trust |
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Like shares in an OEIC, shares in a SICAV have a single price at which all deals are taken. New investors also pay a separate initial charge. In contrast, unit trusts are traditionally 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.
As with OEICs and unit trusts, each individual investor within a SICAV has voting rights, however only SICAVs are required to hold an annual general meeting.
The only SICAVs that can be marketed to UK retail investors are those which comply with the requirements of the UCITS directive and have been recognised for this purpose by the Financial Services Authority (FSA). In contrast, not all UK OEICs and unit trusts are UCITS funds.