OEIC Open Ended Investment Company
Investing in Open Ended Investment Companies - OEICS allow you to invest in a great deal of shares with other people wishing to do the same. Each persons money is pooled together and then invested. Each person is then issued with shares in the fund company. Each share represents an equal fraction of the underlying assets in the fund. An OEIC is a self contained company which appoints directors, holds annual general meetings and issues shares. There can be a charge (known as an initial charge) to cover the setting up of your holding. There is also usually a management charge for the ongoing management of your investment.
An OEIC is classed as 'open ended' because the fund will increase or decrease depending on demand. An investor can sell their shares back to the OEICs. It is usual for shares to be valued in line with the underlying investments held by the fund. This means that the value of your holding could rise or fall on a day to day basis. OEICs offer a wide spread of different markets and types of investment. Whether you require income, growth or both income and growth there will be OEICs to meet your needs. Depending on the level of risk you wish to take with your investment, you will have the opportunity to invest in general funds or funds concentrated in a particular area, such as investment in the UK, Europe or areas such as smaller company funds and technology funds.
Lump sum investments: Yes
Regular premiums allowed: Yes
Flexible payments allowed (stop/start/additional/increase/decrease): Yes
Investment Risk Profiles Available:
Changing funds and risk profile allowed: Yes
Moving to another company allowed: Yes
Life Insurance Included: No
Personal Tax Benefits:
For Non-Shares Based OEIC Income in 2020 Tax Year
For Shares Based OEIC Dividend Income in 2020 Tax Year
Income can form part of your Tax Free Dividend Allowance £2000 per year.
For dividend income received above the yearly allowance, it is charged to tax at a rate where the taxable income falls within the usual income tax bands
Can package inside an ISA to make capital gains tax and income tax free.
Can be held inside Trust: Yes