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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

Junk Bond

A form of debt investment that carries higher risk because of the likelihood that the issuer will default.

Unit Trusts

A collective investment scheme the investors pay money into in exchange for units. The money is invested in a diversified portfolio of assets.

Dirty price

The total price payable on the purchase of a gilt. It’s calculated as the clean price plus accrued interest.

Spot Rate

The currency exchange rate a bank quotes, valid with immediate effect.

Global Investment Performance Standards (GIPS)

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

Bed & ISA

Understand what Bed and ISA is and how it works

Net Asset Value (NAV)

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

Value Investing

The art of buying shares which trade below their value, according to the analysis of the value investor.

Real Estate Investment Trust (REIT)

An investment trust specialised in investing in commercial property such as parking garages or GP offices.

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