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.

‍

More terms

Fundamentals

The data or information that is likely to impact a company's stock price.

Investment Trust

A company that pools money together from multiple investors and then invests it.

Accrued interest

The interest earned on a gilt since the last dividend date. When buying a gilt, the buyer pays the accrued interest at the time of a transaction to the seller in addition to the clean price of the gilt

Margin call

Learn what a margin call stands for in financial terms.

Base rate

What's the base rate?

index-linked gilts

Gilts where the dividends and principal repayments are related to movements in the Retail Prices Index (RPI). This is as opposed to a conventional gilt, where the dividends and principal repayments are fixed in nominal terms.

Unicorn

A startup valued at over £1 billion. They are rare, hence the name.

Quick ratio

Learn what quick ratio stands for in financial terms and how to calculate it.

Account balance

The amount of money a user has stored in a financial repository.

What’s a collective investment scheme?