Investment Company Basics
Investment companies refer to business trusts, corporations, limited liability companies, or any such companies engaged in the business of investing, reinvesting, and trading in securities. Such investment companies typically invest the funds they received from various investors and each investor gets a share of the profits or losses made by the company. The performance of the company is in line with the assets it owns and of course the performance of the securities it has put its money in. As per the federal securities laws, an investment company can be divided into three main categories as follows:
Mutual funds
Closed-end funds
UITs
All the three types of investment companies come with distinct features and you need to carefully go through the available fund information before investing.
