9. Unit Trusts And OEICs

The Motley Fool

Most people choose to invest in an investment fund rather than buying shares directly on the stock market. There are many different types of fund. Some, like investment trusts and exchange traded funds, are traded on the stock market and can be bought and sold via a stock broker. (More about those later.) Others, such as unit trusts, insurance and pension funds, can be either bought directly from the company that runs them or via a discount broker, fund supermarket, or Independent Financial Adviser.

To start with we're going to look at unit trusts and open ended investment companies (OEICs). These two types of fund operate in a very similar fashion, which is why they are often grouped together. Over the last few years many companies have been converting their unit trusts into OEICs, mainly for technical and administrative reasons.