Open Ended Investment Companies (OEICs)
OEICs are another form of collective or pooled investment.
In recent years, OEICs have emerged as serious competitors to unit trusts and investment trusts.
Similarly to these older forms of collective investment OEICs allow investors to:
- reduce the risks of equity-linked investment by investing in a range of assets e.g. shares, gilts & bonds (but not derivatives or property).
- access markets from which they would otherwise be excluded if they only had a limited amount of capital to invest.
Similarly to I.Ts, an investment in an OEIC buys shares in a company, not units in a trust.