Investment Company

Investment company

A firm that that invests the funds of investors in securities appropriate for their stated investment objectives in return for a management fee. See also: Mutual fund.

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investment company

A firm in which investors pool their funds to allow for diversification and professional management. Because individual firms often specialize in particular types of investments, the potential returns and risks vary considerably among firms. Charges to investorsboth to acquire shares in a firm and to pay management for operating the companyvary significantly from investment company to investment company. Also called management company. See also closed-end investment company, conduit theory, management fee, mutual fund, performance fee, regulated investment company.

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Investment Company

A company that provides investment advisory services and/or operates mutual funds. An investment company that operates mutual funds allows its clients to carry greater or lesser risk, depending on their particular investment goals. The investment company may or may not actively manage mutual funds. Investment companies managing more than a certain amount of money must register with the SEC. See also: Asset management, Brokerage.

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Investment company. An investment company is a firm that offers open-end funds, called mutual funds, closed-end funds, sometimes called investment trusts, or exchange traded funds to the public.

By describing a company offering the funds as an investment company, it's easier to distinguish the company from the funds that it offers.

For example, a single investment company might offer an aggressive-growth fund, a growth and income fund, a US Treasury bond fund, and a money market fund.

Or a closed-end investment company might offer an international fund focused on a single country, such as Ireland, or a region, such as Latin America.