Collective investments pool many investors
contributions into one big investment fund. This way you can
buy a stake in a range of investments. Collective investments
are unit trusts, investment trusts and ‘open ended’ investment
companies. All offer a wide range of choice, letting you decide
where you want to invest your money and how much risk you want
to take.
Unit
trusts - Your money buys ‘units’ which
are pooled together with other investors and invested on
your behalf. Units are bought at the offer price and sales
are made at the bid price. The charge you have to pay
when you join a unit trust is the difference between the
bid and the offer price.
Investment trusts are
public limited companies, quoted on the Stock Exchange, which
buy and sell shares in other companies. Investors pool their
contributions with those of others and buy shares in the Investment
Trust. There are a set number of shares and their value changes
depending on the value of the company.
Investment companies (OEICs)
combine a number of the features of unit trusts and investment
trusts. They are public limited companies like Investment Trusts
and investors pool contributions to buy shares. The major difference
between OEIC's and investment trusts is that the number of
shares available is not fixed and is 'open-ended'.
If you want to
find out more about collective investment you can find out
more at the FSA
website.
Need help or advice? A financial adviser can give you help and advice. To
find an independent financial adviser in your area you can contact:
