What is the difference between an OEIC and an investment trust?

Are investment trusts Oeics?

Investment trusts, such as unit trusts and openended investment companies (Oeics), allow you to pool your money with that of other investors to get exposure to a range of assets through a single investment.

Can an OEIC be held in trust?

who are willing to accept the income and capital gains tax consequences, and associated administration, that may arise where an OEIC is held in a discretionary trust.

What is an investment trust?

An investment trust is a public limited company that aims to make money by investing in other companies. Owning shares in an investment trust is a way of investing in a variety of different companies. … The board chooses a professional portfolio manager, such as BlackRock, to manage the company’s investments.

Are unit trusts a good investment?

Unit trusts are a flexible, long-term investment

It’s generally not recommended that investors be invested in stable funds for less than three years, or balanced funds for less than five years. … A lump-sum investment in a unit trust may prove to be the most profitable over the medium to long term.

Are investment trusts a good investment?

Like other pooled investment funds, investment trusts earn income on most of the money they invest. … Investment trusts are also better suited to hold other types of assets, such as commercial property and infrastructure, which are hard for other funds to buy and sell but offer good income.

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Are investment trusts high risk?

In falling markets, gearing will increase shareholder losses. If the investment trust has to pay a high interest rate on its debt, it can erode investment returns. Gearing, or borrowing, makes investment trusts more risky. But risk can bring reward.

Are all investment trusts closed ended?

Investment trusts are effectively companies that hold assets such as shares. … As a closed ended fund, investment trusts have a fixed number of shares in an issue. This allows managers to take a longer-term view because they do not have to sell assets when investors sell their shares.

How do investment trusts take charges?

There are two types of charges to consider: the transaction costs of buying and selling the shares; and the management charges you pay the fund manager of the investment trust. … On fund manager charges, shareholders in investment trusts pay an annual management charge of between 0.4% and 1.5% of their investment.

Do you pay income tax on unit trusts?

Are unit trusts taxable? Yes, they are. In the UK any income distributions or capital growth from unit trust investments could be subject to either income and/or capital gains tax.

Do OEICs pay dividends or interest?

OEICs/UTs are only subject to tax within the fund on income received by the fund manager. This means that: interest and rental income are subject to corporation tax at 20%. There’s no tax to pay on dividends.

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