Collective Investments Schemes explained | MHA Carpenter Box

Collective Investments Schemes explained

What are Collective Investment Schemes?

Collective Investment Schemes (CIS) is the collective way of describing pooled investments such as unit trusts and Open-Ended Investment Companies (OEICs).

Since OEICs were introduced in 1996, they have now become the most common way of investing in collective investments for mainstream investors, with Unit Trusts now far less common.

Who can invest in Collective Investments?

  • Individuals over the age of 18, there is no maximum age limit
  • You can invest individually or jointly
  • Investors can be UK resident or nonresident; however, there may be provider restrictions on investments made by non-UK resident individuals and US citizens may not be able to invest
  • Trustees
  • Limited companies
  • Charities

What are some of the main features of CIS

The fund is established with certain objectives and uses investor funds to buy assets such as shares, corporate and government debt, and other financial instruments which fit that objective.

The value of the shares (or units) depends on the value of the underlying investments divided between the number of shares or units in issue

OEICs and unit trusts are both open-ended investments. If large numbers of investors are leaving the fund the shares or units will be cancelled. If the fund is growing, new shares or units will be created.

You can encash your investment at any time and can usually receive your money within approximately five working days. However, Collective Investments should be long-term investments and you should not consider investing for less than five years

Find out more in our Collective Investments Fact Sheet

Our in-house Financial Advisers can give advice on investments and cash management services that take all of the work out of shopping around for better interest rates.

An initial meeting with an adviser can be arranged at no cost to you, where a range of topics can be discussed and your questions answered.

To arrange an appointment, get in touch with a member of our Financial Planning team on 01903 534587.