Dictionary
/
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.

‍

More terms

Conventional gilts

Gilts where the dividends and principal repayments are fixed in nominal terms. This is as opposed to an index-linked gilt where the dividends and principal repayments are related to movements in the Retail Prices Index (RPI).
Read more

Time Value of Money

The concept that money you have now is more valuable than the same sum in the future.
Read more

Leverage

A method of trading using borrowed money that usually involves a very high level of risk.
Read more

Quantitative easing

Find out what quantitative easing is and how central banks use this monetary measure to encourage economic growth.
Read more

OEIC

Unique to the UK, these funds pool together money to invest from multiple investors.
Read more

Accounting standards

The rules a company follows when preparing financial statements.
Read more

Junk Bond

A form of debt investment that carries higher risk because of the likelihood that the issuer will default.
Read more

Income statement

A summary of a company's income and expenses over a set period of time.
Read more

Inflation

The increase in the prices of goods and services over time, and the process by which money loses its value.
Read more

You’re just minutes away from commission-free investing

open an isa
When you invest, your capital is at risk

Freetrade is your gateway to commission-free investing. Join over 1.6 million users using the Best online trading platform, as voted at the British Bank Awards for six years running.

Accounts
Customer Support
Resources
Company
Important information

Freetrade does not provide investment advice and individual investors should make their own decisions or seek professional advice. The value of investments can go down as well as up and you may receive back less than your original investment. Freetrade is a trading name of Freetrade Limited, which is a member firm of the London Stock Exchange and is authorised and regulated by the Financial Conduct Authority. Registered in England and Wales (no. 09797821).

© 2025 Freetrade, All rights reserved. The Apple logo is a trademark of Apple Inc. App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.

Follow us on