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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

Over-The-Counter (OTC)

A security that is sold outside of an exchange.

Global Investment Performance Standards (GIPS)

A set of standards which investors use to present their investment results.

Geometric Mean Return

A way of calculating compound returns on an investment or savings over a set period of time.

Bond

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Bull market

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Dirty price

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

W-8BEN Form

Non-US individuals and businesses may have to file this form for the Internal Revenue Service (IRS), the US tax authority.

Value Investing

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

OEIC

Unique to the UK, these funds pool together money to invest from multiple investors.

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