Glossary · Fund structure
OEIC
Open-Ended Investment Company
A UK fund set up as a company that creates or cancels shares as money comes in or goes out, priced once a day at the value of what it holds.
An OEIC is open-ended: there is no fixed number of shares. When investors buy, new shares are created; when they sell, shares are cancelled. The price is set by the value of the fund’s holdings at a daily valuation point, so an OEIC does not trade at a discount or premium to that value.
OEICs are bought and sold through a platform or the fund manager, not on a stock exchange, and orders are filled at the next valuation point. Most use a single price for buying and selling; some older unit trusts still quote separate buying and selling prices.
A unit trust works in much the same way but is set up as a trust with a trustee rather than as a company. Both can have accumulation and income classes, and both can usually be held in an ISA or a SIPP.
Related terms
- NAVThe per-unit value of a fund’s assets after its liabilities, normally struck once per day.
- ETFA fund whose units trade on an exchange throughout the day like a share.
- Investment trustA company listed on the stock exchange whose business is investing in other assets. Its shares trade at a market price that can differ from the value of what it owns.
- Accumulation vs income unitsAccumulation units reinvest the fund’s income automatically; income units pay it out as cash.
More terms on fund structure
Definitions describe how a term is used on Fundology. This is information, not advice.