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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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Equity

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

Annualised Rate of Return

The average annual return an investor sees over a set period of time.

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.

Fixed Income

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

American Depository Receipts (ADRs)

Tradeable assets that let Americans invest in overseas stocks using US laws and dollars.

NASDAQ

A US stock exchange specialising in the shares of technology companies.

Balance sheet

A summary of a company's finances, including its assets, liabilities and shareholder equity.

Key Information Document (KID)

A document issued by an investment fund to help investors determine if it's the right fund for them.

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