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

Net asset value

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

Beta

Learn what Beta stands for in finance.

Year to Date (YTD)

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

Rate of Return

Profit on an investment, expressed as a percentage of the investment.

Gross Margin

The difference between a company's revenue and the cost to produce its goods/services, divided by revenue.

UK Treasury bill

A debt instrument issued by the UK government with a maturity of less than one year.

Junk Bond

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

Quick ratio

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Bed & ISA

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