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

Securities

Bonds and stocks.
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Annualised Rate of Return

The average annual return an investor sees over a set period of time.
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Account balance

The amount of money a user has stored in a financial repository.
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index-linked gilts

Gilts where the dividends and principal repayments are related to movements in the Retail Prices Index (RPI). This is as opposed to a conventional gilt, where the dividends and principal repayments are fixed in nominal terms.
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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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Synthetic ETFs

An ETF that that reproduces the return of an index through the use of swaps.
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American Depository Receipt (ADRs)

Tradeable assets that let Americans invest in overseas stocks using US laws and dollars.
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Rate of Return

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

What's the base rate?
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