Understanding OEIC (Open Ended Investment Company)

OEIC is another investment option designed to help investors grow their portfolio

10:26 24 January 2013

Aside from share dealing or stock trading, there is another way for you to invest and grow your money. OEIC or Open Ended Investment Company, is very similar to investment trusts. OEIC's raise money by selling shares to investors.

The money they raise is then invested in the stock market. However, unlike investment trusts, OEICs are open-ended investments.

This means that should the fund manager and his team decided to raise more fund, they can issue more shares. The good thing about this is that it allows investors to enter a well-performing fund.

OEICs employ experienced fund managers who will invest and track the performance of the fund.

They are allowed to change the portfolio to maximize the return for shareholders.

Investors are then charged a certain percentage for fund management fees taken from their earnings.

OEICs are highly recommended for those people who would like to invest but do not have the time nor the skills to trade shares all by themselves.

 

Joining OEICs is relatively easy. The tricky part is choosing the best one that understands your financial goal.