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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

Wall Street

A street in New York that became a figure of speech for the financial markets of the US.

Costs and Charges

The money you pay when investing.

Investment Return

The amount of money made or lost from an investment. Usually expressed as a percentage.

Professional Client

An investor that is able to meet several regulatory criteria.

Withholding Tax

A tax deduction made at the source of the payment.

Spot Rate

The currency exchange rate a bank quotes, valid with immediate effect.

Time-Weighted Rate of Return (TWRR)

A return calculated over the time period invested, that excludes extraneous elements, such as deposits to and withdrawals from the investment accounted.

Maturity date

The date on which a gilt is redeemed and the gilt holder receives the repayment of the nominal amount and final dividend or coupon payment.

American Depository Receipt (ADRs)

Tradeable assets that let Americans invest in overseas stocks using US laws and dollars.

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