Definition

Noun: A type of financial institution that pools money from many investors (who buy shares in the company) to purchase a diversified portfolio of securities, such as stocks and bonds, issued by other corporations or governments.

Usage and Examples

An investment company allows individuals to invest collectively, providing diversification and professional management. * She decided to put her savings into a reputable investment company. * The investment company manages several mutual funds with different risk profiles. * Before choosing an investment company, it is wise to research its fees and performance history.

Advanced Usage and Concepts

• "to be registered as an investment company": Refers to a company that has met specific regulatory requirements (e.g., with the SEC in the U.S.) to operate as such.
  • The firm is registered as an investment company under the Investment Company Act of 1940.
• The term often implies a business whose primary operations are the holding and management of securities for investment purposes.

Variants and Related Terms

• Mutual Fund: A common type of investment company that continuously offers new shares and stands ready to redeem existing shares.
• Closed-end Fund: A type of investment company with a fixed number of shares that trade on an exchange like a stock.
• Investment Trust: A similar pooled investment vehicle, often used synonymously in some contexts.
• Asset Management Company: A firm that manages the investments of the investment company.

Synonyms

• Fund company
• Investment fund (in a general sense)
• Managed fund

Related Phrases and Terminology

• Net Asset Value (NAV): The per-share value of the investment company's portfolio, calculated daily.
  • The investment company calculates its NAV at the close of every trading day.
• Portfolio Management: The activity of selecting and overseeing the investments held by the company.
  • The investment company's approach to portfolio management is very conservative.

Noun

1. a financial institution that sells shares to individuals and invests in securities issued by other companies