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Collective investment scheme

What’s a collective investment scheme?

Learn what's a collective investment scheme

A collective investment scheme is a fancy legal name for any investment fund that involves multiple people pooling their money together and investing in assets.

In the UK, this could include mutual funds, investment trusts or an open-ended investment company.

Collective investment schemes benefit from economies of scale. A larger pool of money invested has the potential to provide greater returns. It can also mean that transactions and other pieces of bureaucracy incur lower costs.

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More terms

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Yield to maturity (YTM)

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Hedge Fund

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Over-The-Counter (OTC)

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A set of standards which investors use to present their investment results.

Junk Bond

A form of debt investment that carries higher risk because of the likelihood that the issuer will default.

Balance sheet

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Profit and Loss Statement (P&L)

A statement that summarises firm's expenses, costs, and revenues incurred during a time period. AKA income statement.

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