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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

Annualised Rate of Return

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

Coupon

Also called a dividend, this is the fixed annual interest paid to gilt holders. It’s usually paid in two equal, semi-annual instalments and expressed as a percentage of the nominal value of the gilt.

Balance sheet

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

Securities

Bonds and stocks.

Costs and Charges

The money you pay when investing.

Maturity value

What's the maturity value of a bond?

Yield to maturity (YTM)

What is yield to maturity and why is it useful?

Xetra

A trading venue operated by the Frankfurt Stock Exchange.

Money weighted rate of return

Learn what Money Weighted Rate of Return or MWRR stands for in finance.

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