What is an OEIC?

You can buy or sell shares in a company but you may prefer to invest in the stock market through Open Ended Investment Companies (OEICs). Both OEICs and unit trusts are UK authorised collective investment schemes. They are investments where your money is pooled with other investors’ money and is put into different asset classes.

The SF t1ps Smaller Companies Growth Fund and SF t1ps Smaller Companies Gold Fund are open-ended investment companies (OEIC).

An OEIC invests in the shares and securities of other companies with the aim of benefiting its own shareholders.

An OEIC has a single pricing structure, which means the buying and selling price of shares is the same.

The price of shares in a Fund at any point in time is based on the value of the investments in the Fund (the underlying assets).

The number of shares in issue depends on the demand for them. As an open-ended investment company, more shares can be created as the demand increases.

Similarly, as shares are cancelled when people withdraw their money, the fund can shrink.