Undertakings for Collective Investment in Transferable Securities (UCITS) are mutual funds that are authorised to be marketed to retail investors in the European Union. UCITS must comply with a harmonised regulatory regime that provides for investor protection, minimum operational standards and depositary requirements.
UCITS funds can be either actively or passively managed. Actively managed UCITS must have a defined investment policy and objective, and must be managed in accordance with that policy. Passively managed UCITS must track a recognised index.
UCITS funds can be either open-ended or closed-ended. Open-ended UCITS can issue and redeem units on a continuous basis. Closed-ended UCITS can only issue units during an initial public offering, and thereafter units can only be traded on a secondary market.
UCITS funds can be either retail or institutional. Retail UCITS are marketed to and available for investment by retail investors. Institutional UCITS can only be marketed to and invested in by institutional investors.
UCITS funds must have a depositary. The depositary is responsible for safeguarding the assets of the fund and ensuring that the fund complies with UCITS regulations.
UCITS funds must be authorised by the competent authority in the jurisdiction where the fund is established.
Are mutual funds collective investment schemes?
Yes. Mutual funds are collective investment schemes, meaning that they pool money from many investors and invest it in a variety of securities. This allows investors to diversify their portfolios and access a wide range of investments, which may be difficult to do on their own. How is an ETF different from a mutual fund? An ETF, or exchange traded fund, is a type of investment fund that owns the securities and tracks an index, such as the S&P 500, meaning it aims to provide the same return as the index. Mutual funds also aim to track an index or benchmark, but are not traded on an exchange. What is investment undertaking tax? Assuming you are asking about an Investment Undertaking Tax (IUT) in the context of a mutual fund, it is a tax that may be levied by a country on income earned by a mutual fund that is invested in that country. The IUT is typically a percentage of the income earned by the fund, and is imposed on the fund, not the individual investors. Who can invest in UCITS funds? In order to invest in UCITS funds, investors must be qualified institutional investors, which generally includes banks, insurance companies, pension funds, and other large financial institutions. However, some UCITS funds may also be available to retail investors.
Is a UCIT a mutual fund?
A UCIT (Unit-Class Investment Trust) is a type of mutual fund that is regulated by the UCITS Directive, a set of European Union directives that provide harmonized regulation for collective investment schemes. UCITS funds can be marketed and sold throughout the European Union, making them one of the most popular types of mutual funds.