What is a 'collective investment scheme'? Definition & meaning

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.

‍

More terms

Value Investing

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

Yield

Income from an investment as a percentage of its current price.

Compound interest

Understand what compound interest means and how it's calculated

Maturity date

The date on which a gilt is redeemed and the gilt holder receives the repayment of the nominal amount and final dividend or coupon payment.

Xetra

A trading venue operated by the Frankfurt Stock Exchange.

Yield curve

A graphical representation of interest rates over time

Over-The-Counter (OTC)

A security that is sold outside of an exchange.

Hedge Fund

Investment funds that are often associated with riskier and shorter-term trading strategies.

Professional Client

An investor that is able to meet several regulatory criteria.

What’s a collective investment scheme?