Investing in Collective Investment Schemes.
Collective Investment Schemes (CIS) are pools of investor funds that are managed on their behalf by a professional fund manager. These schemes
have clearly spelt out investment objectives which determine where funds are invested. These funds are invested in different classes of investments such as bonds, stocks, commercial paper, short term government securities among others. Collective investment schemes in Ghana take the form of either a Mutual Fund or a Unit Trust.

The investor receives units or shares that represent his/her pro-rata share of the pool of funds in return for putting money into these funds. The fund
manager is also compensated for administering the fund and managing the portfolio by charging a fee based on the value of the funds under management. The prices of these shares will fluctuate daily because the underlying value of the assets will rise and fall and since the total value of the
fund is divided by the number of shares issued, your individual stake will rise and fall to reflect this.

Benefits of Collective Investment Schemes
? CIS are run by professional managers with the required skills, experience and resources required to take necessary decisions as to how much, where and when to invest. It is also worth noting that CIS fund managers operate in a highly regulated environment.

? Funds pooled together under CIS are invested in different investment classes and thus attaining diversification, a key element in risk exposure reduction. This however does not fully insulate the fund against market risk.

? Individuals can take advantage of the power of ‘’bulk buying’’ by pooling their funds together no matter how small. This feature also makes CIS cost effective.

? CIS enables investors to get access to their funds whenever the need arises thereby enhancing liquidity.
Collective Investment Schemes are regulated by the Securities and Exchange Commission (SEC) of Ghana.