What is a 'collective investment scheme'? Definition & meaning

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

Venture Capital

A type of financing that investors provide to startups, who sometimes announce getting said financing in TechCrunch, to big fanfare.

Float

Listing a company on a stock exchange, or the shares that are genuinely up for grabs once it’s there.

Holding Period Return

The amount of money generated by an asset during the time that it was held by an investor..

Net asset value

Mutual funds and investment trusts are priced on their net asset value (NAV).

Fundamentals

The data or information that is likely to impact a company's stock price.

Margin call

Learn what a margin call stands for in financial terms.

Fixed Income

An investment that provides a fixed rate of return, often over a specific set of time.

Securities

Bonds and stocks.

Accounting standards

The rules a company follows when preparing financial statements.

What’s a collective investment scheme?