OEIC and Unit Trusts

mattih5

Hi,

What is the difference between an OEIC and a Unit Trust? Both seem to pool money for a fund manager to invest in stocks and shares. The only difference I can seem to find is how the units are priced. In an OEIC the units are bought and sold at the same time.

Is this the only difference?

When I look on sites like Trustnet they seem to group Unit Trusts and OEIC's as one.

dunstonh

Is this the only difference?

Its not the only difference but the single pricing is the major difference. Many Unit Trusts have become OEICs and expect that trend to continue until Unit Trusts no longer exist.

We still refer to them as Unit Trusts even when they are OEICs. There is a trend for Unit Trusts, OEICs and SICAVs to be classed as Investment Funds or Collectives but no one encompassing standard term exists at this stage.

Chrismaths

dh is right, on the whole single pricing is the major difference (ie you buy and sell at the same price, with costs on top with an OEIC).

There are other subtle differences, like swinging price or dilution levy vs "swing to bid/offer"; acd vs trustee, but they make little difference. To confuse you even further, there are also single priced unit trusts!

The best way to think about UT vs OEIC is to treat them as one and the same (that also goes for other "open-ended collectives", such as SICAVs, ICVCs etc).