There is a range of funds available including:
This is an investment fund that is set up using trust law and when you invest in a Unit Trust you get a specified number of units.
A Unit Trust means the fund manager will set up a trust that is separate from their company and will appoint an independent financial institution, such as a bank to act as trustee. The trustee’s role is to look after the assets that the fund is invested in and to monitor the fund manager.
Open Ended Investment Company (OEIC)
This is an investment fund that is set up using company law and when you invest in an OEIC you get a specified number of shares.
This means the fund manager will set up a company that is separate from their own company. The OEIC must have an independent depositary, such as a bank, who is entrusted with the safe keeping of the assets that the fund invests in.
Investment trusts are companies quoted on the stock exchange whose business is managing an investment fund, investing in shares and/or other types of investment. You invest in the fund by buying and selling shares in the investment trust. Once again, there are lots of different strategies and risk levels to choose from.
Insurance company funds
Investment funds are run by life insurance companies. When you invest through an insurance (e.g. an investment bond) or pension product, you can choose how your money is invested. The choice may be from the insurance company’s own funds or investment funds run by other managers.
Where do Stocks & Shares ISAs fit in?
A Stocks & Shares ISA is a ‘wrapper’ that can be put around most investment funds to help save you tax. Placing your investment inside an ISA means you won’t have any personal tax to pay on any capital gains or income you receive. You’ll often find that Stocks & Shares ISAs are sold and marketed as products in their own right.
Find out more about Stocks & Shares ISAs