Skip main navigation

Barclays uses cookies on this website. They help us to know a little bit about how you use our website, which improves the browsing experience– both for you and for others. They are stored locally on your computer or mobile device. To accept cookies, continue to use the website. Alternatively, go to the cookies policy for more information on how to disable cookies.

Question

What is the difference between Unit Trusts/OEICs and Investment Trusts?

Answer

Unit Trusts are open-ended investments; therefore the underlying value of the assets is always directly represented by the total number of units issued multiplied by the unit price less the transaction or management fee charged and any other associated costs.  Each fund has a specified investment objective and is controlled by a Fund Manager.

A difference between a Unit Trust and OEIC is that OEICs quote a single price rather than a bid and offer (buy and sell) price and they are governed by Company law rather than trust law.  Most new Funds launched today are established under the OEIC structure and it is widely predicted that, over time, most Unit Trusts will convert to OEICs.

Investment Trusts are a type of collective investment which are closed-end and as such are constituted as public limited companies.  One of the key differences between an investment trust and a unit trust, is that an investment trust manager is legally allowed to borrow capital to purchase shares.  This leverage may increase investment gains but also increases investor risk.

How helpful was this answer?

Not at all Very helpful