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

Year to Date (YTD)

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

Net asset value

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

Venture Capital

A type of financing that investors provide to startups, who sometimes announce getting said financing in TechCrunch, to big fanfare.

Investment Return

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

Hedge Fund

Investment funds that are often associated with riskier and shorter-term trading strategies.

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.

Fixed Income

An investment that provides a fixed rate of return, often over a specific set of time.

Depository

We look at what is a depository and what role they play in keeping markets work.

Costs and Charges

The money you pay when investing.

What’s a collective investment scheme?