Income Investment Company

AAA

DEFINITION of 'Income Investment Company'

A money management firm whose primary investment goal is to generate income from its investments for its clients. An income investing company typically aims to produce a level of income for its portfolios through investment in bonds and dividend paying stocks. Additionally, preferred shares and other sources of income may be used by fund managers of income investment companies, to generate cash flow.

INVESTOPEDIA EXPLAINS 'Income Investment Company'

Income generating securities typically involve a lower level of risk for investors, as predictable cash flows reduce such risk levels, while limiting large potential gains and losses to the security`s value. Bond coupons and dividends can be either distributed to fund investors or simply reinvested into the income fund, into other income producing securities.

RELATED TERMS
  1. Income

    Money that an individual or business receives in exchange for ...
  2. Growth And Income Fund

    A mutual fund or ETF that has a dual strategy of capital appreciation ...
  3. Income Fund

    A type of mutual fund that emphasizes current income, either ...
  4. Interest

    1. The charge for the privilege of borrowing money, typically ...
  5. Blue Chip

    A nationally recognized, well-established and financially sound ...
  6. Bond

    A debt investment in which an investor loans money to an entity ...
Related Articles
  1. The Perks Of Dividend Reinvestment Plans
    Fundamental Analysis

    The Perks Of Dividend Reinvestment Plans

  2. Tax Tips For The Individual Investor
    Retirement

    Tax Tips For The Individual Investor

  3. Income Funds 101
    Mutual Funds & ETFs

    Income Funds 101

  4. An Introduction To Closed-End Mutual ...
    Mutual Funds & ETFs

    An Introduction To Closed-End Mutual ...

Hot Definitions
  1. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  2. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  3. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  4. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  5. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
  6. Earnings Multiplier

    An adjustment made to a company's P/E ratio that takes into account current interest rates. The earnings multiplier is used ...
Trading Center