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

Base rate

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Volatility

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

Accounting standards

The rules a company follows when preparing financial statements.

Value Investing

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

Total Return

This is the measurement of a fund’s performance in a specific period.

ESG investing

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Collective investment scheme

Learn what's a collective investment scheme

Running yield

The annual interest payment (dividend) divided by the current market price of a bond.

Rate of Return

Profit on an investment, expressed as a percentage of the investment.

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What’s a collective investment scheme?