We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What are Collective Investment Funds?

Malcolm Tatum
By
Updated Jan 30, 2024
Our promise to you
WiseGeek is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGeek, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

Collective investment funds are funds composed of a group of assets and managed by a bank or a trust company. The assets may be a group or collection of retirement, pension plan, or profit sharing plan trusts that are gathered for some specific purpose, such as reinvestment. This particular strategy is often used to create an investment portfolio that is highly diversified and able to perform well in a wide range of economic situations.

While there are several ways to structure collective investment funds, most types are grouped into two categories. An A1 fund is a collection of investments that are brought together for the express purpose of creating a diversified reinvestment trust and generating ongoing revenue for investors with a stake in the fund. The A2 fund also has the goal of earning some type of return, but is usually composed of assets that are considered exempt from taxation by local and national revenue agencies.

One of the benefits of collective investment funds is the ability to manage the collected assets with a greater degree of efficiency. By pooling all the various trusts, mutual funds, and other assets into one group, it is possible to lower the cost of managing those assets. By essentially creating a master trust account to house the assets, it is possible to authorize an executor or administrator to manage the assets within the scope of any provisions related to the collection and the standards set by governmental regulatory agencies.

Collective investment funds are somewhat like mutual funds, in that both approaches do require pooling of assets into a common fund. One of the key differences are the criteria that must be met in order to participate in each of these types of investment vehicles. With most mutual funds, the ability to contribute a minimum amount to the fund is often the deciding factor. With collective investment funds, potential investors must comply with a broader range of qualifications and must continue to meet those standards in order to retain involvement in the vehicle. The exact criterion that must be met to participate in a collective investment fund is determined by the governmental regulatory agency with jurisdiction.

A bank or a trust company usually administers collection investment funds. In most nations, the administrator must register the collection of funds with the governmental agency that oversees the function of investments within that nation. Compliance with regulations that are in place in that nation is essential. There are some situations in which a regulatory may make exceptions for a specific pool of collective investment funds, especially if investors are limited to only customers that are covered in the terms of the exemption.

WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including WiseGeek, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.
Discussion Comments
Malcolm Tatum
Malcolm Tatum
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.