For immediate release: Monday 17th March 2003
UNIT TRUSTS, OEICS AND INVESTMENT TRUSTS – their differences explained
Investment funds have several key advantages over direct investment in the stockmarket, but investors may be confused between the three established types of funds on offer; unit trusts, OEICs and investment trusts. The IMA’s “Effective Investment” factsheet explains the structural differences and similarities between these fund types and, in particular, focuses on the features of the lesser-known Open Ended Investment Company (OEIC – pronounced ‘oik’).
As the number of OEIC funds continues to grow (48% of all ‘open ended’ funds are now OEICs rather than unit trusts, compared to 35% a year ago), it’s likely that investors will come across the term with increasing frequency. As such, it’s important they understand the different characteristics of an OEIC fund, but moreover, that all three investment fund types have advantages and disadvantages according to the investor’s individual situation. The factsheet includes a useful table that compares the main structural features of the three schemes ‘at a glance’.
Clare Arber, Head of Communications at the IMA, commented :
“In a sense, it doesn’t matter which type of investment fund you use, as all three fund types can be useful in the right circumstances. But they are sufficiently different that you should be very clear about what it is that you are buying.
“With the end of the tax year fast approaching, investors may be looking more closely at their financial situation – perhaps even considering a new investment. The Effective Investment factsheet will help them understand the differences between unit trusts, OEICs and investment trusts, and find the most appropriate scheme for their needs.”
For a free copy of this factsheet, readers can call the Unit Trust Information Service on 020 8207 1361 or view it on the IMA website,
For further information, please contact:
Helen Stephenson, Communications Officer, IMA, 020 7831 0898
Selina Staines, Communications Co-ordinator, IMA, 020 7831 0898
Notes to Editors:
1. A copy of the Effective Investment factsheet is attached.
2. The IMA also publishes a number of other useful factsheets to help savers to understand unit trust and OEIC investment. These can also be obtained free of charge by calling the Unit Trust Information Service on 020 8207 1361 or by visiting the Association’s website at http://www.investmentuk.org
- Directory – A list of unit trust and OEIC funds available
- Managers – A comprehensive list of contact details for retail members of IMA
- Handbook – Saving in investment funds in five simple steps
- Saving for Children – A guide to investing on behalf of children in unit trusts and OEICs
- Tax-free Savings – A helpful guide to Individual Savings Accounts (ISAs)
- Unit Trusts and Tax – Completing your tax return. What you need to tell the taxman
- Ethical Investment – A guide to ethical investment funds
- Monthly Savings – A guide to building up capital in investment funds
- Corporate Bond Funds – The alternative way to high income
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Investment Management Association is a company limited by guarantee registered in England and Wales Registered number 4343737. Registered office as above.