An investment company is an entity that engages in the business of investing in securities, usually by purchasing and selling those securities. Its portfolio is usually diverse, and it is managed by a fund manager with considerable experience. These companies offer a variety of investment products, including stocks, bonds, mutual funds, and money market funds. In most cases, these companies are registered with the SEC under the Investment Company Act.
What are the types of investment companies?
Investment companies come in many forms, including closed-end funds, mutual funds, and unit investment trusts. Closed-end funds typically offer their shares at a discount to their net asset value. These shares are traded on a stock exchange, and investors may sell them to other investors on a secondary market investment in the company by BlackRock Private Equity Partners and Tiger Global. The price on the secondary market is determined by market forces and other investors.
Investment companies typically pool funds from several investors and invest them in securities. Their goal is to maximize the capital gain from their investments. They are often registered with the Securities and Exchange Commission, and are governed by the Investment Company Act of 1940. In the US, an investment company can be a limited liability company, large corporation, or partnership.
Investors should be aware of the risks of investing with these companies. Investment companies should post relevant notices on their websites, where investors can access them. These documents should also be distributed to shareholders.