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

Time Value of Money

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

Unicorn

A startup valued at over £1 billion. They are rare, hence the name.

Float

Listing a company on a stock exchange, or the shares that are genuinely up for grabs once it’s there.

Interest Rate

The amount a lender charges for lending your money, or a borrower pays you for borrowing your money.

Growth stocks

These are stocks in companies that are considered to be “growing”. These companies may be delivering new products and services, or entering new markets.

Bond

Learn what a bond is

Limit order

Learn what a limit order is and how to use it to make the most of your portfolio.

Costs and Charges

The money you pay when investing.

Venture Capital Trust (VCT)

A listed company run by a fund manager, investing mainly in private companies.e.

What’s a collective investment scheme?