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.

More terms

SPAC

Find our what a SPAc or special purpose acquisition company is.
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Retail Prices Index (RPI)

An index published each month by the Office for National Statistics, which measures the level of retail prices in the UK. Cash flows on all index-linked gilts are linked to the RPI.
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Year to Date (YTD)

A period of time that starts with the first day of the current calendar year and ends with today.
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Bed & ISA

Understand what Bed and ISA is and how it works
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Venture Capital Trust (VCT)

A listed company run by a fund manager, investing mainly in private companies.e.
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Net asset value

Mutual funds and investment trusts are priced on their net asset value (NAV).
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Unit Trusts

A collective investment scheme the investors pay money into in exchange for units. The money is invested in a diversified portfolio of assets.
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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.
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Over-The-Counter (OTC)

A security that is sold outside of an exchange.
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