A collective investment vehicle is any entity that allows investors to pool their money and invest the pooled funds, rather than buying securities directly as individuals.
Collective investment vehicles are usually managed by a fund management company which is paid a fee for doing so. The fee is usually a percentage of funds under management but it may also be linked to performance. The latter is a common arrangement for hedge funds.
Other costs that investors in various collective investment vehicles may face are initial or exit charges, spreads, broker's commission and stamp duty.
Single priced vehicles have no spread but the savings on this are usually more than offset by initial or exit charges.
The commonest types of collective investment vehicle are unit trusts (called mutual funds in the US and most other countries), investment trusts (more accurately called investment companies outside the UK), exchange traded funds, OEICs, and REITs.