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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

Profit and Loss Statement (P&L)

A statement that summarises firm's expenses, costs, and revenues incurred during a time period. AKA income statement.

Year to Date (YTD)

A period of time that starts with the first day of the current calendar year and ends with today.

Bed & ISA

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OEIC

Unique to the UK, these funds pool together money to invest from multiple investors.

Custodian bank

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Stock Market

A place where shares of publicly listed companies are traded.

After-hours trading

Trading outside of a stock exchange's opening hours.

American Depository Receipts (ADRs)

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

Leverage

A method of trading using borrowed money that usually involves a very high level of risk.

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