What are the other differences between unit trusts and OEICs?
Pricing is the main difference between the two types of funds. Unit trusts have a ‘bid/offer spread’ i.e. the buying (or bid) price is higher than the selling (or offer) price. This is known as ‘dual pricing’. The difference in the bid and offer price is equivalent to the separate initial charge that investors pay when they invest in an OEIC. The bid/offer spread is sometimes quoted as a percentage and referred to as the initial charge for investing in the unit trust. OEICs use a single pricing model i.e. you get the same price whether you are buying or selling shares in the OEIC. You then pay the initial charge separately. This charging structure is considered more transparent and fair on investors.
