In the UK OEICs are the preferred legal form for new open-ended investment over the older unit trust.
By using economies of scale they facilitate access to professional investment management for small investors.
While historically, unit trusts were favoured legal vehicles for investment, in the 1990s it was felt that the UK government should allow a corporate form that could repurchase its own shares without the standard restrictions in the Companies Act.
This ensured that OEICs fell within the scope of the Undertakings for Collective Investment in Transferable Securities Directives (UCITS).
[citation needed] An OEIC can act as an umbrella scheme holding various sub-funds each with their own investment goals.