what is an OEIC?

Answer 1

OEIC stands for an open-ended investment company which works in a very similar way to a unit trust except that an OEIC is legally constituted as a limited company (Plc). OEICS have been operating outside the UK for some time but only since 1997 has it been possible to operate an OEIC in the UK. OEICS are not trusts and do not therefore have a trustee. However they have a depositary which holds the securities and has similar duties to a unit trust trustee.

Most OEICS operate as umbrella funds which means the OEIC is authorised and then can set up sub-funds without gaining individual authorisation for individual sub-funds. Each sub-fund has different investment aims, e.g. a sub-fund may specialise in the shares of small companies or in a particular country, e.g. the USA. Each sub-fund can also have different charges and minimum and maximum investments. Unit trusts are allowed to do this too, but few do.

Most OEICS only have one unit price and the initial charge is added as an extra. Unit trusts always have two prices, the lower or bid price is what you get when you sell back to the managers; the higher or offer price is what you have to pay when you buy. More on OEICS.
Smurf

Answer 2

Open Ended Investment Company

Answer 3

Open-Ended investment company.

It is a cross between a Unit Trust and an Investment trust.

The 'Open-Ended' part refers to the fact that it will create and destroy units in the fund as appropriate. This means that investors can buy into and leave the fund whenever suits them. The opposite to this is a close-ended fund which only has one issue of units i.e if you don't buy in at the start you have to find someone who is willing to sell you their units before being able to get in.