Talk:Investment fund

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Aim of this Page[edit]

Many types of collective or pooled investments exist in different countries. The aim of this page is to reflect the many similarities these schemes have to avoid needless duplication on pages for individual schemes.

I have tried to keep an unbiased POV and to keep the generic information as just that.

Please add further country sections where you have the information. simonthebold 23:51, 7 November 2005 (UTC)

The content of fund types may need to be addressed[edit]

These include:

Hedge fund

Mutual fund

Pension fund

Provident fund

Insurance contract --- pseudo fund???

Also, is this article a duplicate one?

http://en.wikipedia.org/wiki/Investment_fund

--—Preceding unsigned comment added by 13:37, 30 October 2006 (talk) 222.64.55.53

Investment fund was merged with Collective investment scheme. A unit-linked or with-profits insurance policy certainly sounds like a collective investment scheme to me, and I see someone added them to the UK section. Please feel free to expand and globalize where appropriate. --Hroðulf (or Hrothulf) (Talk) 22:28, 20 April 2008 (UTC)

Logical Extension[edit]

If any one of the three is failing, then because each is non-correlated (i.e., behaves independently), by logical extension at least one of the other two is doing well.

That's not logical at all. 216.191.217.90 00:15, 10 February 2007 (UTC)

No it isn't. You should have been been WP:Bold and removed it as I have. -- John (Daytona2 · Talk · Contribs) 17:48, 21 April 2008 (UTC)

Series[edit]

I have added this article to the SERIES {{Financial market participants}} in place of Mutual fund, as it gives a more global perspective. Any objections? --Hroðulf (or Hrothulf) (Talk) 22:33, 20 April 2008 (UTC)

Good idea, that seems correct to me. Art Markham (talk) 16:35, 1 June 2008 (UTC)

Lack of references[edit]

This has to be one of the most unreferenced articles I've seen. -- John (Daytona2 · Talk · Contribs) 17:47, 21 April 2008 (UTC)

It has three inline references, and most statements are fairly uncontentious, so don't need references by the Good Article guidelines. Mostly it is a signpost article, to help a reader find articles on specific scheme types - so it probably won't ever be nominated as a Good Article. Signposts don't really need references. For these reasons, I don't think the {{Citations missing}} banner is justified, but I agree to the extent that more references would definitely make it a better article. At the moment, there are no contentious statements tagged with {{fact}} or {{dubious}}, but that doesn't meant there isn't one. --Hroðulf (or Hrothulf) (Talk) 00:04, 22 April 2008 (UTC)
Your policy is at odds with WP. There must be loads of books on investment which can be used as sources. As it is, this lack of rigour has allowed POV statements. GA has nothing to do with it - this is about fundamental WP policies and guidelines. -- John (Daytona2 · Talk · Contribs) 20:22, 25 April 2008 (UTC)
John, I don't have a policy of my own, and I didn't delete the banner, even though I think it is over the top in this case. I really do wish people would add references every time they add statements to the body of an article — but Wikipedians have allowed each other, by policy, to add unsourced statements as long as they were verifiable and not harmful to the articles. I have done that myself, probably too many times. It seems that is how most of our million (?) articles still look today.
Regarding your 2 reversions of mine and Simon123's edits, I thought I was right to restore Simon123's edit because the lead should have a paragraph that reflects two major sections in the body. Simon123 did not add unsourced statements to the article - he merely summarised existing unsourced statements in the lead. It is not great that the unsourced statements are there (at Collective investment scheme#Generic information - advantages) and disadvantages, but they are fairly neutral so I guess that consensus editing allowed them to stay.
I personally would like to see {{fact}} and {{dubious}} tags against those unsourced statements that are particularly problematic, so that editors can address those first. A fully sourced article, signpost or not, is far better than an unsourced one in so many ways, so I don't think we are in disagreement there. We do disagree about what the intermediate articles on their way there should look like. --Hroðulf (or Hrothulf) (Talk) 22:14, 25 April 2008 (UTC)
You said "we don't cite sources in the lead". That's news to me - I assumed it was your policy. Is it ? Or is it WP policy ?
Further, a small example of lack of compliance with Wikipedia - "If you believe it is possible to select the stock which will do well you will actively manage your investment buying and selling upon whichever principles you decide."
Given the time this article has existed, why hasn't anyone cleared it up, and told whoever adds it of the WP standards rather than to allow them to add more non standard entries ?
The same writing style and associated lack of compliance has occurred on a number of finance related articles and it is imo bad behaviour to expect others to do the work of working through them and making them compliant. Consequently, it's now time to, at least, stop further non compliant material being added.
The {{refimprove}} tag has been in place for 5 months without a noticible improvement. -- John (Daytona2 · Talk · Contribs) 15:23, 27 April 2008 (UTC)

John, I don't think this article has any serious permanent maintainers - hence the banner has made no difference.

Active management - eughh - what a jarring break from house style. It should be referenced, and it should be third person. It looks fairly neutral - it just seems to be a clumsy attempt to define active management. I may fix it if I get a chance. As you said, clumsy style and lack of sourcing seems to run across dozens, perhaps hundreds, of finance articles. Looking at article histories, it seems the problems go back several years. The articles have become victims of much worse things - guesswork, errors, quack theories, content forks, lack of global perspective, and even walled gardens. Maybe the new WikiProject Investment will attract some help. Lets roll our sleeves up!

--Hroðulf (or Hrothulf) (Talk) 17:56, 27 April 2008 (UTC)

Other than stopping the situation worsening, I don't have the time or inclination, I'm afraid. -- John (Daytona2 · Talk · Contribs) 18:09, 27 April 2008 (UTC)
Wikipedia:LEAD#Citations doesn't seem to be as strict as I remember it (for good reason). As of today it says "Complex, current, or controversial subjects may require many citations; others, few or none." I stand corrected.
I am not sure I am keen on the approach you suggest for stopping the situation worsening. When someone adds something that is not compliant, but is not against the 5 pillars, tag it, ask them to fix it, but please don't revert it. We want people to write the encyclopedia. --Hroðulf (or Hrothulf) (Talk) 18:17, 27 April 2008 (UTC)
In my experience it is quite difficult to comprehensively reference finance articles. People don't tend to learn this sort of thing at school, so there are very few textbooks available. Most knowledge is just within the industry, in the heads of busy people who don't have the time or inclination to dig out obscure references from books that may or may not exist. For that reason this is never going to look like a science article or a history article, so I think we just need to a little more lenient than we might otherwise be - flag up problems and hope people fix them by all means, but I agree that we should just let people write the article. Art Markham (talk) 16:43, 1 June 2008 (UTC)
When I wrote the article I did so to replace much of the inaccurate and misleading rubbish that existed on Wikipedia. 'Art Markham' is right when he suggests much of this type of article is written by industry practitioners , unfortunately much was written by US practitioners who tend to love their jargon and have little idea of alternative models elsewhere in the world. I have tried to be generic and inclusive in this article. I 'll add some references from the CII manuals I have where relevant. simonthebold (talk) 21:38, 6 August 2008 (UTC)
I've re-written the Active or passive management section. Hope you approve. simonthebold (talk) 14:08, 11 August 2008 (UTC)

Fees/Charges[edit]

I think there is not enough information on standard fees/charges charged by the funds. I came to wikipedia for information on dilution levies but there's nothing. I'd suggest adding a section, but I'm unsure of whether to put it under this article or one of the other similar ones - mutual funds or OEIC etc.... thoughts? Whitehatnetizen (talk) 09:30, 6 August 2008 (UTC)

Good idea. My thought would be that it belongs in all of them (in much the same way as information on climate belongs in continent, country and city articles.) --Hroðulf (or Hrothulf) (Talk) 10:20, 6 August 2008 (UTC)
I added the section. Hope you like it. simonthebold (talk) 22:28, 6 August 2008 (UTC)
The problem is that the discussion fails to distinguish between the sales charge, which may be a front-end or back-end load, an asset-based charge, or some combination of the two, and the investment management charge, which in every example I can think of is some form of asset-based charge. John M Baker (talk) 02:54, 7 August 2008 (UTC)
Hi guys, I've just updated the fees section to clarify what a dilution levy is. I generally suck at encycopedic-style writing so feel free to change it arround but I think the person who put the section on dilution levies there may have misunderstood what they are for. perhaps, if we are going into this level of detail, there should be more information about what a box is (a reserve of units held by the fund itself and not allocated to any particular investor in order to provide a buffer, reducing the need to go to market (and incurring a dilution levy) to aquire or sell assets if there is a surplus of buy or sell orders during a particular trading period.) but I don't know where to put this. info Whitehatnetizen (talk) 15:28, 13 August 2008 (UTC)

Article title[edit]

"Collective investment scheme" seems a bit contrived as a title, especially since they are almost never referred to that way. I would think that "investment fund," "investment pool," or "fund (investment)" would be better. Is there any reason not to change the article title to one of these? Tentatively, my thinking is that "investment fund" may be the most natural name. John M Baker (talk) 03:52, 11 August 2008 (UTC)

The trouble with each of your suggestions is that the are inprecise. The premise for the article was to explain the similarities in this type of arrangement around the world in a gloabilzed manor, i.e. to avoid being overly country specific. I chose collective investment scheme because it seemed the most precise way to sum up the common factors. Collective as in numerous investors, investment because that is the aim, and scheme because many of them have more than one fund. I toyed with vehicle instead of scheme but this implies being self-contained which is not always the case. simonthebold (talk) 13:22, 11 August 2008 (UTC)
Unfortunately, "scheme" has tremendously negative connotations outside of British English, so it seems to me that using that term is inherently country-specific. "Collective investment vehicle" might work. What arrangements of this type are not self-contained?
I also have some uncertainty as to just what is covered by this article. Would a hedge fund or private equity fund be covered, since they're not publicly held? A bank common trust fund, which is available only to bank fiduciary customers and not priced daily? John M Baker (talk) 15:08, 11 August 2008 (UTC)
See some of the other examples in scheme. Should these be changed also? Nobody has mentioned negative connotations or complained in any way about the article title for the 3 years its existed. Not really grounds to rename the article.
Unitised insurance funds exist within an insurance company and connot be purchased directly. The vehicle is the insurance contract.
Hedge funds are collective investment schemes but not a type of scheme. A hedge fund is an investment strategy rather than a generic type. Underneath they are a unit trust, limited partership or some other type. They are characterized by preference to low regulation, performance fee structures and restricted accessability. There is scope to add a section on regulation of CIS which could incorporate some of this discussion and discuss private unit trusts and the like. Think of this article as a high level overview of the subject with indivual types going into more detail. simonthebold (talk) 17:30, 11 August 2008 (UTC)

I am new to this editing so I may have made a mistake in going ahead and editing without asking, but in the topics Mutual Fund, and Collective Investment Scheme, I changed the word scheme to vehicle. ie investment vehicle. I felt it was more neutral in tone. I could not change the title however and wickapedia suggested I get the support of this discussion group, so I am asking for that support (Katherine 260) — Preceding unsigned comment added by Katherine260 (talkcontribs) 17:50, 12 September 2012 (UTC)

I'm about to go on vacation, so don't really have time to address this in detail right now. I will just note briefly that a quick look on Google suggests to me that "collective investment scheme" is used frequently as a generic term in the UK, but never, ever, in the U.S. As a practising investment management lawyer in the U.S., I will add that I can't even imagine the term being used here. This article has not received a huge amount of attention of Wikipedia, so I don't think the failure of the issue to come up previously is significant.
Thanks for clarifying the article intent with your new language. I'll try to add to this at some point when I get back. John M Baker (talk) 01:05, 12 August 2008 (UTC)
I agree Collective investment scheme is not the generic name used in the US, probably investment company would be the closest, however this in itself is not a reason to change the title of the article.
It is the international generic term though. A Google search will soon show that CIS is a term used in many countries: UK, Austrailia and other commonwealth countries but also most African countries and Cyprus, Russia, India, China and others. Even the SEC uses the term in their international documents see [1] and [2]. The OECD use it [3] and probably others. simonthebold (talk) 14:00, 12 August 2008 (UTC)

No. Collective investment scheme is not a term used in the USA. The SEC specifically states the following:

An investment company invests the money it receives from investors on a collective basis, and each investor shares in the profits and losses in proportion to the investor's interest in the investment company. The performance of the investment company will be based on (but it won't be identical to) the performance of the securities and other assets that the investment company owns.
The federal securities laws categorize investment companies into three basic types: Mutual funds (legally known as open-end companies); Closed-end funds (legally known as closed-end companies); UITs (legally known as unit investment trusts).

Emphasis mine. The information is current, sourced from U.S. SEC Investment Companies, which is included in the article. Collective investment scheme is based on EU directives according to the article, see Section 1. It may be used in non-EU nations, I don't know. It isn't used in the USA. In fact, hedge funds and private equity funds are SPECIFICALLY excluded by the U.S. SEC from the category of investment companies i.e. "collective basis". --FeralOink (talk) 07:51, 6 September 2013 (UTC)

I am from the UK, and I am not sure that "collective investment scheme" is the best phrase. It is a technical usage, but these things are almost invariably referred to as "funds" or "investment funds" even in the UK, and those phrases are commonly used everywhere else too. If "collective investment scheme" is used everywhere except the US, but "investment fund" is used everywhere including the US and more commonly, I think the article should be moved to "Investment fund". Westmorlandia (talk) 12:47, 8 May 2009 (UTC)

I am not sure the US terms should be used in offshore investment since this type of investment is pretty much irrelevant to US citizens. They being taxed on worldwide assets mean the higher charging structure for offshore investing renders it useless for the vast majority. Most providers will not accept a US citizen or individual resident in the US. Countries like the UK have a different tax system which makes it much more attractive for UK onshore and expats to consider this investment, even with the higher charges. Most are tax deferred schemes. The most common reference to them in the UK is ‘offshore investment bond’ or ‘offshore insurance bond’. The correct technical term is: single premium whole of life unit linked insurance policy. By wrapping an investment in this product there is a great deal of tax advantageous. What those are very much depends on the client’s tax domicile and residence status, a library could be written on this area alone. Offshoots are a plenty- Qrops (pronounced queue- rops) have become popular-these are Qualifying Recognised Overseas pension Schemes. This subject is a can of worms though. Striking is the lack of information on providers in the British Channel Islands in particular Guernsey, Isle of Man; Jersey tends to be banking based, the insurers tend to opt for the two former. The consumer protection is often higher than onshore. Isle of Man has a different system to Guernsey- which has a system of 90% of assets being held in the name of third party trustees. The Isle of Man systems flaws have recently been showing up. They use a collective form of co-insuring against loss/failure. Most are linked to Trust companies and trust laws. One of the benefits of using an insurer based in Guernsey or the Isle of Man is that they have in-house experts with a great deal of experience in setting up trusts for clients and can provide pretty standard tax avoidance advice along with wealth protection trusts. Often it is not necessary to set up a separate offshore company, or take advice from Trustees. — Preceding unsigned comment added by 218.186.10.235 (talkcontribs) 06:10, June 23, 2009 (UTC)

I am a newbie to Wiki, so please forgive any faux pas.

From the research I have done this title is problematic.

To be clear, in one sense it is spot on - I found, from the World English Dictionary the following definition of “scheme”:

7: chiefly ( Brit ) a plan formally adopted by a commercial enterprise or governmental body, as for pensions, etc

But despite the fact that the definition is valid, there are 4 significant definitional problems that make the title very misleading. 1) It is a regional usage (“Chiefly Brit”) 2) The usage was listed as the 7th of 8 definitions, and so is clearly not a common usage, presumably even in England 3) The usage was only listed in 1 of 5 dictionaries that I researched online, so that one could not readily ascertain the meaning 4) There is another much more frequent and much more ubiquitous usage which was listed in every dictionary I researched and it was the 2nd most common definition which was along the lines of "a crafty, unethical, or fraudulent project, scheme to defraud investors" (note that it specifically connotes investment fraud, further compounding the problem)

Beyond the pure issues of definition, there are some other issues.

Given that a more common usage is about unethical activity. One would expect, as I did, that, at the very least there would be some discussion of “Collective Investment Schemes” (since that is the title) – like “Ponzi Schemes”, “Matrix Schemes”, “Pyramid Schemes”, and “Get Rich Quick Schemes” (all of which have, as does this article, “scheme” in the title). I thought it would be highlighting the similarities of schemes, not legitimate investments. I certainly did not expect, nor would the vast majority of English speakers, it to be a discussion of mutual funds and other similar such legitimate investments. So it was misleading in that regard. Then to find out that the aforementioned actual schemes are not even mentioned makes it doubly misleading.

To see if my impression was out of line, I did some digging around WikiP, I found that…

There is not 1 other legitimate investment that WikiP has listed as a scheme (there is no “mutual fund Scheme”, no hedge fund “scheme”, not “Bond scheme” etc). And further, every investment scheme listed (other than this entry) is a shady, underhanded or illegal type of investment activity.

I then looked at the types of investments mentioned within this article. Of 48 items mentioned only 1 has the word scheme (Managed Investment Scheme per s 9 of the Corporations Act (Cth) 2001), nearly all others are “Funds” or “trusts”.

Simply by virtue of the fact that one could easily take scheme to mean an underhanded or illegal activity, the title lends itself to potential confusion on a large scale and I would presume that we are interested in clarifying rather than confusing, even at the cost of not using a valid regional definition.

If the title is not changed, the article MUST clarify the fact that a regional use of the term is being used and furthermore that the more common definition is NOT included. This seems a somewhat unwieldy approach compared to improving the title to be more reflective of common understanding.

Kevinkkinal (talk) 03:54, 24 April 2011 (UTC)

Severe problems with this article[edit]

The article begins, see Section 1 with:

"The term "collective investment scheme" is a legal concept deriving initially from a set of European Union Directives to regulate mutual fund investment and management. The Undertakings for Collective Investment in Transferable Securities Directives 85/611/EEC, as amended by 2001/107/EC and 2001/108/EC (typically known as UCITS for short) created an EU wide structure, so that funds fulfilling its basic regulations could be marketed in any member state. The basic aim of collective investment scheme regulation is that the financial "products" that are sold to the public are sufficiently transparent, with full disclosure about the nature of the terms."

The single source that is cited for that paragraph, specifically the last sentence, is a book published in 1932. It even says that in the references! The European Union obviously did not exist in 1932. If the basic aim of collective investment scheme regulation was established in 1932, then it CANNOT be "a legal concept deriving initially from a set of EU Directives to regulate mutual fund investment and management".

Next, in the United States, the U.S. SEC specifically EXCLUDES both hedge funds and private equity funds as investment companies:

"private investment funds with no more than 100 investors and private investment funds whose investors each have a substantial amount of investment assets are not considered to be investment companies even though they issue securities and are primarily engaged in the business of investing in securities. This may be because of the private nature of their offerings or the financial means and sophistication of their investors. For additional information on these types of private investment funds, please refer to Hedge Funds..."

See my note above for additional details. I have edited the article accordingly.

As others have mentioned, there is a very dire need for adequate sources in this article. If it is legally valid outside the U.S.A., that's great, but an indication of geographic locality is essential. --FeralOink (talk) 08:04, 6 September 2013 (UTC)

Proposed move[edit]

I think it is high time we moved this article to a new name that better reflects a worldwide view of its subject. Tentatively, I would suggest the simplest term, "Fund," with the existing Fund article moved to "Fund (disambiguation)." I would also be open to "Investment fund" or "Collective investment vehicle." I don't think there should be too much argument about the unsuitability of "Collective investment scheme." It does not reflect a worldwide view of its subject, being used only in the United Kingdom and a few other Commonwealth countries. In the United States, which is the largest fund market, it is an entirely unknown term, with pejorative connotations. Even in the United Kingdom it is somewhat obscure. I ran a search in the London Times, 2001 - 2008, and "investment fund" was used 2478 times, while "collective investment scheme" was used only 206 times. John M Baker (talk) 21:50, 10 July 2014 (UTC)

Moved as proposed, by DGG on 15 July 2014. Vaughan Pratt (talk) 15:40, 29 April 2015 (UTC)