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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

Technical Analysis

Examining price movements of shares and other assets, and trying to predict how they will move in the future.

Profit and Loss Statement (P&L)

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

Securities

Bonds and stocks.

Value Investing

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

Money laundering

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

Capital

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Leverage

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

Zero coupon bonds

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Annualised Rate of Return

The average annual return an investor sees over a set period of time.

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