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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

Global Investment Performance Standards (GIPS)

A set of standards which investors use to present their investment results.

Net asset value

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

Equity

The amount of money a company would be left with by subtracting its liabilities from the value of its assets.

Investment Return

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

Net Asset Value (NAV)

The value of a company's assets relative to the number of shares it has.

Arithmetic Mean

The sum of a set of numbers added together and then divided by the total amount of numbers in that set.

Income statement

A summary of a company's income and expenses over a set period of time.

Volatility

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

After-hours trading

Trading outside of a stock exchange's opening hours.

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