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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

Fixed Income

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

Money laundering

A method of moving money obtained illicitly through the financial system so it can be used legally.

Clean price

The quoted price of a gilt, which excludes accrued interest

Hedge Fund

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

DMO

The United Kingdom Debt Management Office. It’s an executive agency responsible for managing the government’s debt and cash needs, primarily through issuing gilts and Treasury bills.

Annualised Rate of Return

The average annual return an investor sees over a set period of time.

Zero coupon bonds

What is a zero coupon bond?

Costs and Charges

The money you pay when investing.

Exchange-Traded Fund (ETF)

A collection of investments, pooled into a single fund that can be bought and sold on a stock exchange.

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