what is an open ended investment company oeic 
an open ended investment company oeic is a type of investment fund domiciled in the united kingdom that is structured as a company in its own right to invest in stocks and other securities oeic shares do not trade on the london stock exchange the price of the shares is based largely on the underlying assets of the fund these funds can mix different types of investment strategies such as income and growth small cap and large cap and can constantly adjust their investment criteria and fund size oeics are called open ended because they can create new shares to meet investor demand also the fund will cancel the shares of investors who exit the fund oeics are regulated by the financial conduct authority fca which means services such as the financial ombudsman are available to investors if problems arise 1understanding an open ended investment company oeic an open ended investment company pools investors money and spreads it across a wide range of investments such as equities or fixed interest securities this diversification helps reduce the risk of losing an investor s principal oeic funds offer the potential for growth or income they usually function as a medium to long term investment held for five to ten years or longer any u k investor 18 years or older may invest in a wide range of funds managed by industry experts as in the united states there are various levels of risk available for capital growth income generation or a combination of both shareholders may invest for themselves or their children when children turn 18 years old they hold the investment in their own right charges for oeic sharesas of 2021 investors pay an initial charge of between 0 to 5 when buying new shares this type of front end load lowers the amount of money going into the fund to purchase shares in addition there is an annual management charge amc of around 1 to 1 5 of the value of an investor s shares the amc covers the fund manager s services funds that are not actively managed such as index trackers have much lower fees most funds quote a total expense ratio ter or an ongoing charges figure ocf each charge includes the amc and other expenses used for comparing different products the ter and ocf do not include dealer charges that can add significantly to annual costs if the fund has a high turnover rate there may also be an exit charge for selling shares based on a percentage of the total value of the sale however many oeics do not charge exit fees investing in oeicsoeics are useful for investors who do not have the time interest or expertise to actively manage their investments investors may invest a single payment or monthly payments with minimum amounts depending on the fund also access to funds online or over the phone is generally easy further shareholders may pay a fee when moving between funds offer professional money management