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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

Diversification

An investment strategy in which money is put into a variety assets.

Coupon

Also called a dividend, this is the fixed annual interest paid to gilt holders. It’s usually paid in two equal, semi-annual instalments and expressed as a percentage of the nominal value of the gilt.

Accounting standards

The rules a company follows when preparing financial statements.

Wall Street

A street in New York that became a figure of speech for the financial markets of the US.

Collective investment scheme

Learn what's a collective investment scheme

Yield curve

A graphical representation of interest rates over time

Investment Return

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

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.

Yield to maturity

What is yield to maturity and why is it useful?

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