Investment company
An investment company is a company whose main business is holding securities
Security (finance)
A security is generally a fungible, negotiable financial instrument representing financial value. Securities are broadly categorized into:* debt securities ,* equity securities, e.g., common stocks; and,...

 of other companies purely for investment
Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...

 purposes. The investment company invests money on behalf of its shareholders who in turn share in the profits and losses.

In United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...

 securities law, there are at least three types of investment companies:
  • Open-End Management Investment Companies (mutual fund
    Mutual fund
    A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors to buy stocks, bonds, short-term money market instruments, and/or other securities.- Overview :...

  • Closed-End Management Investment Companies (closed-end fund
    Closed-end fund
    A closed-end fund is a collective investment scheme with a limited number of shares. It is called a closed-end fund because new shares are rarely issued once the fund has launched, and because shares are not normally redeemable for cash or securities until the fund liquidates.Typically an...

  • UITs (unit investment trust
    Unit Investment Trust
    A Unit Investment Trust is a US investment company offering a fixed portfolio of securities having a definite life. UITs are assembled by a sponsor and sold through brokers to investors.-Types:...


A fourth and lesser-known type of investment company under the Investment Company Act of 1940
Investment Company Act of 1940
The Investment Company Act of 1940 is an act of Congress. It was passed as a United States Public Law on August 22, 1940, and is codified at through . Along with the Securities Exchange Act of 1934 and Investment Advisers Act of 1940, and extensive rules issued by the Securities and Exchange...

 is a Face-Amount Certificate Company
Face-amount certificate company
A face-amount certificate company is an investment company which offers an Investment Certificate as defined by the Investment Company Act of 1940....


Also popular are private investment funds which are simply private companies that make investments in stocks or bonds, but are limited to under 100 investors, are private and are not regulated by the SEC. These funds are often composed of very wealthy investors.
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