Unit Trusts & OEICs
Did you know we can advise you on stock market investments that offer good potential for growth, but also spread and minimise risk?
Unit Trusts and Open-Ended Investment Companies (OEICs) are two types of investment funds that help investors spread the risk of investing over a broad variety of very different investments.
Investors do not require a large lump sum to invest in Unit trusts and OEICs. The flexibility and range of these interesting investments can also be accessed through a range of monthly savings plans.
Find out more about Regular Savings in funds now, or call 0800 678 5929
When investing money, the broader spread offered by these funds can be used by professional funds managers to minimise the volatility and fluctuation of an investment. This strategy is known as asset allocation, and is often done by including elements in the fund which react differently to various market conditions.
For instance, while stocks and shares can rise and fall quite sharply in reaction to a stormy market, bonds (which are loans to governments or companies) respond much more sluggishly. As such, bonds are often used in the investment mix to dampen the volatility of the stocks and shares elements.
Ask us more about funds investments by making an Investment Enquiry or calling 0800 678 5929 now!
Investing in Unit Trusts
A unit trust is a collective investment scheme, which, as the name suggests, means that your money is pooled together with (many) other investors to create a fund which may be worth many millions of pounds. As an investor, your money buys you a certain amount of units in the fund. The number of units can increase or decrease, as investors buy and sell.
The fund is then placed in the hands of professional managers, who research and gather market knowledge of various stock markets and investment products around the world, and seek investments which they expect to increase in value in the future, thus increasing the value of the fund. The money from the fund can be invested in a variety of ways. In addition to stocks and shares, it may also buy bonds (loans to governments or companies), or invest in property or cash.
Unit trusts usually publish the value of their unit price on a daily basis, so that investors can track the value of their investment as regularly as they wish.
Investing in OEICs
An Open-Ended Investment Company (OEIC) functions in a similar way to a unit trust, except that is has shares rather than units.
