Unfortunately not, there are three main types of investment fund, and they're all a bit different. It's useful to know why so you know exactly what you're buying, but don't get too hung up on this (because it's the fund manager that decides how they want to run the fund).
The Unit Trust
Has been about for years, and it's the most popular fund by a mile. What happens is: your money gets combined with others in a collective investment. In return you get units, each with a value or unit price, that go up or down depending on the performance of the fund's holdings.
The big feature in buying and selling Unit Trusts is the bid-offer spread. The price you buy a unit for (the offer) will be different than the price you sell it for (the bid). The difference in prices is called the bid-offer spread.
The Open-Ended Investment Company (OEIC)
OEICs are becoming more popular with fund managers. This is because they're more flexible than their older cousins, the Unit Trusts.
The OEIC was first dreamed up in the mid 1990s to help harmonise fund structures across Europe. The great thing about the OEIC is that it's a fund that thinks it's a company. (Mmmm, that's going to need a bit of explaining, isn't it?)
Basically, the OEIC is still a collective investment, but in return for that investment you get a bunch of shares. So instead of having a set number of 'units' to deal with, the OEIC fund manager can issue new shares or buy back existing shares in the fund (just like a regular company can), giving him more room to play about. Thus hopefully getting more money for you in the process.
There is one great, big and rather splendid difference to bear in the mind, though. Namely, there is no such thing as a bid-offer spread when dealing with OEICs. In simple terms, the buying price is the same as the selling price, (although that price can still rise and fall like any other).
Unlike a Unit Trust, whether you're buying or selling a share, it's the same price. Which is all rather reassuring, isn't it?
The Investment Trust
Similar to an OEIC in that it's structured like an actual company, they're even listed on the stock market. However, Investment Trusts differ from both OEICs and Unit Trusts in that they're closed (which means they only offer a limited number of shares). As with a regular company, Investment Trust shares can go up and down according to the supply and demand of the shares.
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