Investment Company

AAA

DEFINITION of 'Investment Company'

A corporation or trust engaged in the business of investing the pooled capital of investors in financial securities. This is most often done either through a closed-end fund or an open-end fund (also referred to as a mutual fund). In the U.S., most investment companies are registered with and regulated by the Securities & Exchange Commission under the Investment Company Act of 1940.

Also known as "fund company" or "fund sponsor".

INVESTOPEDIA EXPLAINS 'Investment Company'

Investment companies are business entities, both privately and publicly owned, that manage, sell, and market funds to the public. They typically offer investors a variety of funds and investment services, which include portfolio management, recordkeeping, custodial, legal, accounting and tax management services.

RELATED TERMS
  1. Investment Company Act Of 1940

    Created in 1940 through an act of Congress, this piece of legislation ...
  2. Management Investment Company

    A formal name for a company that sells and manages a portfolio ...
  3. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  4. Securities And Exchange Commission ...

    A government commission created by Congress to regulate the securities ...
  5. Diversification

    A risk management technique that mixes a wide variety of investments ...
  6. Pipeline

    1) An investment company whose purpose is to collect investment ...
Related Articles
  1. Should You Follow Your Fund Manager?
    Mutual Funds & ETFs

    Should You Follow Your Fund Manager?

  2. Hedge Funds Hunt For Upside, Regardless ...
    Options & Futures

    Hedge Funds Hunt For Upside, Regardless ...

  3. Do Focused Funds Provide a Better Outlook?
    Mutual Funds & ETFs

    Do Focused Funds Provide a Better Outlook?

  4. Mutual Fund Basics Tutorial
    Mutual Funds & ETFs

    Mutual Fund Basics Tutorial

Hot Definitions
  1. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  2. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  3. Leading Indicator

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

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

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  6. 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 ...
Trading Center