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.

BREAKING DOWN '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. Net Investment Income

    Income received from investment assets (before taxes) such as ...
  2. Investment Income

    Income coming from interest payments, dividends, capital gains ...
  3. Portfolio Income

    Income from investments, dividends, interest, royalties and capital ...
  4. Income

    Money that an individual or business receives in exchange for ...
  5. Active Income

    Income for which services have been performed. This includes ...
  6. Franked Investment Income

    Income that is received as a tax-free distribution by one company ...
Related Articles
  1. Investing

    Satisfy Your Investment Objectives With Income Funds

    Discover the various categories of income funds and the types of investors for whom they are appropriate.
  2. Financial Advisor

    3 Ways Retirees Can Generate Income From Investments

    Retirement can last a long time, which means people not only have to save for retirement but see it generate income. Thankfully there’s lots of ways to do that.
  3. Investing

    How to Find Mutual Funds With High Dividends

    Learn about the important factors to consider when looking for mutual funds that pay high dividends, including how they may impact your taxes.
  4. Personal Finance

    All About Income

    Income is the money you or a business earns by providing goods or services, or through investments.
  5. Investing

    Top Income Investing Strategies for 2016

    Dividend paying stocks and equity income funds are two ways to get yield out of your investments this year.
  6. Financial Advisor

    Best Income Investing Strategies for Retirees

    The past few years have been tough for retirees seeking income from their investments. Here are some of the best strategies that can help.
  7. Investing

    Bond Funds Boost Income, Reduce Risk

    These funds can provide stable returns for those who depend on their investment income.
  8. Managing Wealth

    How Will Your Investment Make Money?

    Discover the basic types of investment income and which asset classes pay them.
  9. Investing

    Can You Become Rich Investing in Mutual Funds?

    Find out how you can use mutual fund investments to get rich, including which types of funds are best suited for rapid wealth creation.
  10. Retirement

    The Best Way To Build Your Retirement Portfolio

    Retirement means changing your investment goals from growing assets to generating income. Here's how.
RELATED FAQS
  1. What are the main advantages of fixed income securities?

    Learn why the addition of fixed income securities are common among investors who are attempting to limit their exposure to ... Read Answer >>
  2. Do mutual funds pay dividends?

    Find out when mutual funds pay dividends and how these distributions are generated, including what types of assets are included ... Read Answer >>
  3. Which mutual funds pay the highest dividends?

    Learn about which types of mutual funds pay the highest dividends, including how dividend stock and bond funds generate the ... Read Answer >>
  4. What is the difference between capital gains and investment income?

    Learn about the difference between capital gains and other types of investment income, such as dividends paid on stock or ... Read Answer >>
  5. How does a person gain from an investment?

    There are two main ways in which a person gains from an investment. The first is by capital gains, the difference between ... Read Answer >>
Hot Definitions
  1. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  2. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  3. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  4. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  5. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  6. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
Trading Center