OEICS, Investment Trusts or SICAVs?

OEICs, Investment trusts or SICAVs are investment companies that pool investors’ money and use expert fund managers to invest in shares, bonds or other types of investment. They give you diversified, professionally managed exposure to the growth potential of global stock markets.

What are OEICs and SICAVs?

OEIC stands for Open Ended Investment Company while SICAV stands for Société d’Investissement à Capital Variable. Both OEICs and SICAVs allow you to pool your money with other investors so that you can invest more cost-effectively in stock and bond markets.

They are both ‘open ended’. This means that more shares can be issued each time someone invests, which means you can always buy or sell whenever you want. OEICs are UK domiciled funds and SICAVs are available in continental Europe (with Luxembourg being their favoured home).

OEICs and SICAVs offer a wide range of choice by sector, region and by the type of investment, such as equity funds and bond funds.

What are investment trusts?

Investment trusts are closed ended, meaning they issue a fixed number of shares, which are publicly traded on the London Stock Exchange. They can borrow money so that they can increase their exposure to stock markets and therefore potentially enhance returns (known as gearing). Gearing will exaggerate market movement both up and down which could mean sudden and large falls in value.

As stock market-listed companies, investment trusts also have independent boards to represent your needs as a shareholder, meaning you get the same level of protection as the shareholders of any other public limited company.

Differences between open-ended and closed-ended funds

There are some key differences between investment trusts, OEIC funds and SICAV funds.
See our comparison table