Field
Hamlin Unit Trusts and OEIC's
Field Hamlin Unit Trusts and OEIC's
Field
Hamlin - Unit Trusts
When you invest money in a unit trust, your money goes into
the unit trust 'pool', or fund. The value of the fund is broken
down into units, and a unit trust investor will receive a
statement showing the number of units they own. The value
of the units can go up or down in proportion to the value
of the whole fund, depending on the underlying performance
of the fund. The value of the units are listed in some daily
newspapers, so unit trust investors can easily keep a track
of how their funds are doing over time. You can buy or sell
units at any time. If more people are buying units than are
selling, more units are issued and the fund manager uses the
extra money to buy more stocks and shares. Because there is
no limit to the number of units that can be issued, unit trusts
are called open-ended funds. More people invest in unit trusts
than in any other type of collective stock market investment
in the UK. At the moment around £ 187 billion is invested
in unit trusts. More than ten million individuals - more than
one-sixth of the population - invest in unit trusts.
Field Hamlin - OEiC's
An
OEiC is a collective investment product which offers a convenient
and easy way for first time or novice investors to dip a toe
into the stock market. Collective investments pool your investment
with those of other individuals to give you better buying
power. This money is then invested by a professional fund
manager in, most often, a broad mix of stock market shares,
but it can also be property, bonds or other forms of fixed
interest. This way, instead of putting all your money into
the shares of just one or two companies, you could spread
your money across more than 60 or 70 different companies.
This reduces the amount of risk you are taking because you
are not dependent on the fortunes of just a few companies.
This type of investment is also much more cost effective than
investing in companies one at a time. Of course, the sparkling
performance of one company offers less of a benefit to a collective
fund than if you directly held the shares of that one company,
but then again, a struggling company has less of a negative
impact too. Another attraction of collective investment vehicles
is their flexibility. There is typically no limit to the amount
of money you can invest in an OEIC, and you can choose to
make either one-off lump-sum investments, regular monthly
investments, or a combination of the two. You can also stop
or start your contributions as you like without penalty. Traditional
collective investments are investment trusts, which have been
around for over 100 years and unit trusts which first entered
the market over 60 years age). Open-Ended Investment Companies,
or OEiC's, are the newest form of investment vehicle, having
only been introduced in 1996, yet they combine the best features
of both unit trusts and investment trusts within a more modern
structure.
For
further information on Field Hamlin Unit Trusts and OEIC's
visit the Field Hamlin website.
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