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

Bull market

We explain what a 'bull market' means

Maturity date

The date on which a gilt is redeemed and the gilt holder receives the repayment of the nominal amount and final dividend or coupon payment.

Xetra

A trading venue operated by the Frankfurt Stock Exchange.

After-hours trading

Trading outside of a stock exchange's opening hours.

Volatility

A measure of how much the prices of an asset or index vary over time.

Junk Bond

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

Holding Period Return

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

DMO

The United Kingdom Debt Management Office. It’s an executive agency responsible for managing the government’s debt and cash needs, primarily through issuing gilts and Treasury bills.

Dirty price

The total price payable on the purchase of a gilt. It’s calculated as the clean price plus accrued interest.

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What’s a collective investment scheme?