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

Stock Exchange

A physical/digital place where stockbrokers and traders can buy and sell securities.

Gilt

What is a gilt?

Equity

The amount of money a company would be left with by subtracting its liabilities from the value of its assets.

Nominal amount

The face value of a gilt. It represents the amount that will be repaid to the holder at maturity and is also used to calculate the dividend or coupon payment.

Professional Client

An investor that is able to meet several regulatory criteria.

Packaged Retail and Insurance-based Investment Product (PRIIP)

An investment where, regardless of its legal form, the amount repayable to the retail investor is subject to fluctuations.

Value stocks

Stocks in companies that aren’t necessarily growing fast, but instead are dependable and stable.

Net Asset Value (NAV)

The value of a company's assets relative to the number of shares it has.

Value Investing

The art of buying shares which trade below their value, according to the analysis of the value investor.

What’s a collective investment scheme?