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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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Leverage

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

Interest Rate

The amount a lender charges for lending your money, or a borrower pays you for borrowing your money.

Spot Rate

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

United States Dollar (USD)

The famous greenback our friends in the US use as currency.

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.

Stock Exchange

A physical/digital place where stockbrokers and traders can buy and sell securities.

Internal Rate of Return (IRR)

A means of calculating the potential future return on an investment.

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