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Open-Ended Investment Companies (OEICs)

Open-Ended Investment Companies (OEICs) are professionally-managed funds where investors' money is pooled together to gain access to a wide range of assets and financial markets

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What is an OEIC?

Financial Investment Glossary

Instead of buying and selling individual investments yourself, it can be easier and more cost-effective to invest in the markets through an Open-Ended Investment Company (OEIC).

An OEIC is a collective investment scheme, or managed fund, in which the money of many investors is pooled together to purchase investments in a range of different assets, according to the investment policy of the managed fund.

An OEIC can be set up as a single company or as a company with several sub-funds, known as an umbrella scheme. Each sub-fund within the umbrella scheme has its own investment policy and objective.

 

What are the benefits?

There are many advantages to investing in an OEIC rather than directly in the stockmarket:

  • Diversification — OEICs can offer greater potential for growth and can help to reduce your investment risk as your money is spread across a range of assets rather than relying on the fortunes of just one. In essence your eggs aren't all in one basket
  • Expert management — Your investment is managed by a professional fund manager, supported by expert research and market analysts to help you achieve your goals
  • Economies of scale — When you invest in an OEIC your money is pooled with that of other investors, enabling fund managers to achieve economies of scale when they buy and sell holdings on your behalf

There are risks and considerations with investing in OEICs:

  • The value of investments will fluctuate, which will cause prices to fall as well as rise and investors may not get back the original amount they invested.
  • You need to be comfortable making investment decisions and balancing the level of risk you are willing to take with the potential for growth.
  • We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to your financial adviser

Share classes and charges

There are three share classes to choose from when you invest with M&G. The choice depends on whether you’re investing with or without a financial adviser, and how much you’re investing.

  • Sterling Class A Shares are for those investing without an adviser
  • Sterling Class R Shares are for those investing via a financial adviser or with myM&G
  • Sterling Class I Shares are for those investing £500,000 or more per fund (with or without a financial adviser), or for those with an overall investment value of £250,000 or more with myM&G

Income or accumulation?

Once you have chosen your share class, you need to decide how you would like your money to work for you.

You can choose to receive a regular income from your investment and have this paid into your bank account, or you can choose to have any income your investment generates kept within your fund to add to your investment; the latter is known as accumulation. 

  • Accumulation shares - Accumulation shares keep income within the fund rather than paying it out. Accumulation shares are shown with Accumulation (or Acc) after the fund name. 
  • Income shares - If you would prefer to receive an income from your investments, you can choose income shares when you invest. Income shares are shown with Income (or Inc) after the fund name. With income shares the income could be paid monthly, quarterly, six monthly or annually depending on the fund. Receiving an income may affect the return you get back on your investment.

Charges

We don’t apply entry or exit charges to investments into M&G funds Sterling Class shares.

The amount of ongoing charge applied to each share class of a fund is shown on its KIID and may vary from year to year. Please refer to the Fund’s Prospectus for detailed information about all applicable charges.

Please read the Important Information for Investors document for more information on share classes, charges and share types.

OEIC investment limits

The table below shows the minimum investment limits for M&G OEIC funds. There is no upper limit to the amount you can invest outside of an ISA or Junior ISA.

Minimum investment limits for OEIC funds A Shares R Shares I Shares
Initial investment £500 £500 £500,000
Initial investment (myM&G*) n/a £1 £1
Additional investment £100 £100 £10,000
Additional investment (myM&G*) n/a £1 £1

*Investing in M&G OEIC funds with myM&G is via the General Investment Account (GIA). GIAs enable you to invest with no annual upper limit, however GIAs do not offer the potential tax benefits of an Individual Savings Account (ISA).

Target Market Information

This document explains who we believe the product is, and is not, suitable for. This is based on M&G’s opinion and doesn’t take into account your individual circumstances.

Funds available

You can invest in any of our OEIC funds in the Fund Centre.

Invest now

For information on making an investment with M&G, please visit our Invest with M&G page.

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. We are unable to give financial advice. If you are unsure about the suitability of your investment, speak to your financial adviser. The views expressed in this document should not be taken as a recommendation, advice or forecast.



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