Your first choice for investment may be to take advantage of an Individual Savings Account (ISA), but if you have already used your ISA allowance, you can still invest in a Unit Trust/OEIC (Open-Ended Investment Company).
Unit Trusts and OEICs, (a modern version of a Unit Trust), and these are a good way for smaller investors to enjoy the power of big institutional investors, putting their money into a variety of assets that could offset some of the risk. Your money is put into a fund, along with money from other investors. This pooled fund is then invested across many different investments by a fund manager. The fund manager looks after the money in the fund, making regular adjustments depending on the performance of individual holdings, market conditions and the fund's objective. On ‘Wraps & Platforms’, these are generally referred to as a ‘General Investment Account’ (GIA).
Please remember though that the value of an investment may fluctuate and is therefore not guaranteed. You may not get back the full amount of your original investment.
What does investing in a unit trust or OEIC involve?
Unit Trusts and OEICs are best viewed as long-term investments (five years or more), but you can access your money whenever you need to. Depending on your provider, there may be a charge for this. Investment can be made directly with an Investment provider, but is now more commonly accessed (with advice from your Financial Adviser) via a Wrap or Platform.
Tax treatment of unit trusts and OEICs
Investments held in a unit trust and OEICs are primarily subject to ‘capital gains tax’, however there certain tax rules which may require Individuals to pay ‘Income Tax’ too. To find out more about tax, see Investment and Taxation or simply contact us.
