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Collective Investment Scheme

Collective Investment Scheme, Types & How Scheme Work

Collective Investment Scheme (i.e. a mutual fund) is an investment vehicle comprising a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, commodities, money market instruments, securities, treasury bills and other capital markets instruments.

Collective Investment Scheme Work?
When you invest your money in a Collective Investment Scheme portfolio, you buy a portion of the participatory interests in the total Collective Investment Scheme portfolio. The assets of a collective investment scheme portfolio are held by the trustees.

Is a Fund a Collective Investment Scheme?
A fund manager will invest the pooled money in one or more Types of Asset, such as stocks, bonds or property. If a collective investment scheme is not authorised or recognised it is considered an unregulated collective investment scheme (UCIS).

Are Unit Trusts Collective Investment Schemes?
Unit trust funds are collective investment schemes and are governed by the Collective Investment Schemes Control Act. A unit trust management company invests the money on behalf of the trust in assets such as shares, bonds and money-market investments, which form the portfolio of the fund.

Types of Collective Investment Schemes
There are three different types of Collective Investment Schemes, namely Collective Investment Scheme in Securities, Collective Investment Scheme in Property and Collective Investment Scheme in Participation Bonds, each of which will be explained.

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