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An ICVC or Investment Company with Variable Capital is a type of open-ended collective investment formed as a corporation under the Open-Ended Investment Companies Regulations of the United Kingdom. They are also known as OEICs (pronounced oik) from these regulations. The terms ICVC and OEIC are used interchangeably with different investment managers favouring one over the other. In the UK ICVCs are the preferred legal form of new open-ended investment over the older unit trust. As an open-ended company the manager must create shares when money is invested and redeem shares as requested by shareholders. As with other collective investments ICVCs main function is to make money for the shareholders. This is achieved via investing in different asset classes such as equities, fixed interest investments and property. By using economies of scale they facilitate access to professional investment management for small investors. ICVCs were developed to be similar to European SICAVs and US mutual funds. Unlike a unit trust, an ICVC can act as an umbrella scheme holding various sub-funds each with their own investment goals. For example one ICVC may hold a subfund investing called UK Smaller Companies and another subfund called UK Equity Income. Each subfund has its own investment aims and is held separately from other subfunds within the same ICVC. This has some cost savings for the investment manager.
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