Unit Trusts & OEICs

With unit trusts and OEICS (open-ended collective investment schemes), savers' money is pooled and then invested across a range of stocks and shares. You can invest lump sums or make regular contributions of as little as £20 per month.

The range of companies and securities invested in will be more varied than the small investor could achieve on their own. The fund is then professionally managed to achieve maximum returns consistent with the stated investment objectives. By putting money into a collective scheme, investors have the potential to achieve the higher returns associated with long-term stockmarket exposure but with less risk than investing directly in one or two shares.

Stock market investments such as unit trusts and OEICs can be held in a trust or designated account on behalf of children who are under 18. But it is important to make sure that the necessary forms are completed if your child is to enjoy their tax-free entitlements.