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

Custodian bank

Learn what a custodian bank is.

Fixed Income

An investment that provides a fixed rate of return, often over a specific set of time.

United States Dollar (USD)

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

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.

Bond

Learn what a bond is

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).

Xetra

A trading venue operated by the Frankfurt Stock Exchange.

Holding Period Return

The amount of money generated by an asset during the time that it was held by an investor..

What’s a collective investment scheme?