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

Retail Prices Index (RPI)

An index published each month by the Office for National Statistics, which measures the level of retail prices in the UK. Cash flows on all index-linked gilts are linked to the RPI.
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Nominal amount

The face value of a gilt. It represents the amount that will be repaid to the holder at maturity and is also used to calculate the dividend or coupon payment.
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Gross Margin

The difference between a company's revenue and the cost to produce its goods/services, divided by revenue.
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Global Investment Performance Standards (GIPS)

A set of standards which investors use to present their investment results.
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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.
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52-week high/low

The highest, or lowest, price a share has traded at in a passing year.
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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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Interest Rate

The amount a lender charges for lending your money, or a borrower pays you for borrowing your money.
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A US stock exchange specialising in the shares of technology companies.
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