OEICs (Open Ended Investment Companies)

These are collective investments that pool your money to purchase a range of stocks and shares. They have a simple pricing structure, and OEICs offer very similar benefits to Unit Trusts.

OEICs (pronounced ‘oik’) can set different charges for different types of investors and different investment amounts, and in this sense offer a more flexible alternative to established unit trusts.

OEIC’s, by being ‘open-ended’, are able to respond to market demand, and can contract or expand in size accordingly. As more people invest into such ‘open-ended’ funds, more shares are created and the fund increases in size. When people withdraw their money from these funds, the fund shrinks in size and shares are cancelled.

One of the key features of OEIC’s is the ability to invest in ‘sub-funds’ of the main fund, each of which can have different investment objectives. This means that it’s possible to invest for income and growth in one single fund, without having to purchase a range of share types.

OEIC’s can be invested in through an ISA (Individual Savings Account). When you invest into a fund, you are allocated a number of shares. Providing they are available for the fund you want to invest in, you are able to choose either income shares (if you require an income from your investment), or accumulation shares (if you are looking for your investment to grow).

Key features of OEIC’s include:

• They offer investments in the form of shares.
• The number of shares issued can rise and fall as shares are bought and sold.
• OEICs units have a single price.
• Initial charges are set out separately from the share price.

Legal & General’s Financial Advisers, who are based in local Bradford & Bingley branches, are able to offer you investments through a large number of specially selected funds, giving you access to some of the best performing funds on the market.