A collective investment scheme is run by an entity that allows investors to pool their money and invest in the pooled funds, rather than buying securities directly as individuals. Generally, these are managed by a fund management company that is paid a fee for doing so. The fee is usually a percentage of the amount of funds under management, and it may also be linked to performance. Other costs that investors in various collective investment schemes may face are entry or exit charges, spreads, broker’s commission, and stamp duty. Mutual funds and hedge funds are the most common collective investment schemes.