Reading through the small print sent out by investment firms, you may come across a variety of names for investment funds. Oeic, Sicav, unit trust and investment companies - they all aim to make you money but have very different structures and some may be more suitable for your needs than others.

So, it is worth taking the time to understand the differences. British collective investment funds that pool money from lots of investors go back to 1868 when the Empire was in full swing and railway companies needed cash to fund their worldwide expansion.

The first funds were investment companies - listed companies that offer shares to investors and then buy shares in other companies with the monies they collect in. Just like fully functioning companies, investment companies have boards of directors to oversee the managers' efforts, shareholders with voting rights, and reports and accounts.

They are known as 'closed-ended' as they have a fixed number of shares in the market. If the fund does well, the value of the investments rises (called the net asset value) and the share price should follow - in theory at least.

In reality, there is usually a time delay and shares can trade at a discount when worth less collectively than the value of the fund, or at a premium if worth more.

Investment companies can also borrow money so they can invest in more stocks. Called gearing, this can accelerate performance if the fund manager does well, but can damage performance by a greater amount if the manager fails to deliver.

As issuing new shares can be cumbersome and costly, a new form of fund was born on St George's Day, 23rd April 1931. Called the unit trust, it issues new units every time someone invests in the fund, so the value of the fund and the value of the units are always in line, with no discounts or premiums. Also, as the funds are not structured as companies, there is no stock market listing and, instead of shareholders, investors are called unit holders and have trustees to ensure all is above board.

Unit trusts usually have a bid-offer spread, the difference between the selling price and the buying price. It is not dissimilar to the way holiday money is sold at one rate and bought at another at foreign exchange bureaux. As unit trusts took off in Britain, another type of fund was taking Europe by storm.

The société d'investissement à capital variable is a mouthful in any language so the name is usually shortened to Sicav. They are popular in France, Italy, Switzerland and the Benelux countries, and increasingly sold offshore to UK investors.

Like investment companies, Sicavs have shareholders with voting rights and boards of directors. Luxembourg is their favoured home and many are sold right across Europe. Like unit trusts, however, they are able to take in new money by issuing new shares each time someone invests. They also tend to have sub-funds that deal in different asset classes or separate currencies for various markets.

Unlike their continental counterparts, unit trusts are difficult to sell in Europe as international buyers do not like the British trust structure. So in 1997, the Open Ended Investment Company came into existence - the 'Buy British' version of the Sicav.

Ungraciously dubbed the Oeic - pronounced 'oik' - these initially offered only single pricing on their shares but now can have a spread or single pricing, just like unit trusts.

A number of fund managers run more than one type of collective investment scheme. Jupiter, for example, offers investment companies and unit trusts to UK investors and also offers a Sicav to international fund buyers.

Choosing which type of fund to buy depends not only on where you live, but what your attitude to risk and your aims and objectives are. It is worth seeking professional advice to ensure you make the right choice. Many UK advisers prefer to stick to Oeics or unit trusts for their greater familiarity.