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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

Depository

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

Unit Trusts

A collective investment scheme the investors pay money into in exchange for units. The money is invested in a diversified portfolio of assets.

Dirty price

The total price payable on the purchase of a gilt. It’s calculated as the clean price plus accrued interest.

Geometric Mean Return

A way of calculating compound returns on an investment or savings over a set period of time.

LSE

London Stock Exchange, which was founded in 1571 and now has a market cap of almost $5 trillion.

Volatility

A measure of how much the prices of an asset or index vary over time.

Zero coupon bonds

What is a zero coupon bond?

S&P 500

Find out what is the definition of the S&P 500 index.

Investment Return

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

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