are highly liquid
feature low investment minimumscarry high annual fees sales chargesincur taxesmust maintain cash reserves restricting returnsrequire mid to long term investment horizonoeic are not tax advantaged so interest and dividends are taxable and selling shares may incur a capital gains tax of course the amounts involved must exceed dividend and capital gains tax allowances also shareholders may hold oeics tax free in an individual savings account isa or other u k pension plan 23however investment values and resulting income are not guaranteed and may increase or decrease depending on investment performance and currency exchange rates for funds investing in foreign markets therefore a shareholder may not get back the original amount invested u s residents may not hold shares in oeics u s shareholders must have the oeic sell their shares or transfer their investments to u k residents oeics vs unit trustsin the united kingdom unit trusts uts and oeics are the two most common types of investment funds and they also have much in common like oeics unit trusts consist of a manager who buys stocks and bonds for holders of a fund in an open ended format the two mainly differ in the way they are priced unit trusts will have two prices oeics have only one price per day based on the net asset value nav of the underlying assets of the fund oiecs tend to have lower fees than uts because they have a simpler structure many investment companies have been converting unit trusts into oeics for this reason 4real world example of oeicsbritish oeics are comparable to american mutual funds and many u s investment companies that do business in the u k offer them one such is fidelity international an overseas division of fidelity investments in july 2018 the division announced it was instituting variable management fees for five uk domiciled oeics including the fidelity special situations fidelity european fidelity asian dividend fidelity global special situations and fidelity american funds 5the change effectively reduced the base amc of the funds by 10 5correction oct 13 2022 this article previously misstated that shares of oeics trade on the london stock exchange 