Definitions for "Collective investment Scheme"
Keywords:  wider, scheme, unitholders, oeics, pool
A system for pooled investment in securities where investors combine their resources to buy investments together. It is achieved through the medium of Unit Trusts or Investment Trusts. The benefit to the small investor is the ability to spread his limited resources over a wider pool of investments, giving the benefit of diversification, and to profit from the expertise of the fund manager running the scheme. Known in the USA as mutual funds. See also Undertakings for Collective Investment in Transferable Securities and Open-Ended Investment Companies.
These are financial products where money from a number of different investors are pooled and then invested by a *fund manager according to specific criteria. The scheme or fund is divided into segments called 'units', which are to some degree similar to shares. Investors take a stake in the fund by buying these units - they will therefore become unitholders. The price of a unit is based on the value of the investments the fund has invested in (Net asset value).
Any scheme or arrangement made or offered by any company under which the contributions, or payments made by the investors, are pooled and utilized with a view to receive profits, income, produce or property, and is managed on behalf of the investors is a Collective Investment Scheme. Investors do not have day to day control over the management and operation of such scheme or arrangement.