What is '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

Money laundering

A method of moving money obtained illicitly through the financial system so it can be used legally.

Packaged Retail and Insurance-based Investment Product (PRIIP)

An investment where, regardless of its legal form, the amount repayable to the retail investor is subject to fluctuations.

Limit order

Learn what a limit order is and how to use it to make the most of your portfolio.

Quick ratio

Learn what quick ratio stands for in financial terms and how to calculate it.

Net Income (NI)

The money a firm is left with from sales after subtracting taxes and different business costs.

W-8BEN Form

Non-US individuals and businesses may have to file this form for the Internal Revenue Service (IRS), the US tax authority.

Collective investment scheme

Learn what's a collective investment scheme

Forward pricing

Mutual funds are traded on a forward pricing basis, meaning the price you see will be different to the price you may trade at.

Net asset value

Mutual funds and investment trusts are priced on their net asset value (NAV).

What’s a collective investment scheme?