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.

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More terms

Earnings per share

We look at what earnings per share mean and how to calculate it

Oligopoly

A situation in which a market or industry is controlled by a small group of companies.

Yield curve

A graphical representation of interest rates over time

Professional Client

An investor that is able to meet several regulatory criteria.

Inflation

The increase in the prices of goods and services over time, and the process by which money loses its value.

LSE

London Stock Exchange, which was founded in 1571 and now has a market cap of almost $5 trillion.

OEIC

Unique to the UK, these funds pool together money to invest from multiple investors.

Running yield

The annual interest payment (dividend) divided by the current market price of a bond.

Balance sheet

A summary of a company's finances, including its assets, liabilities and shareholder equity.

What’s a collective investment scheme?