Sunday, December 26, 2010

Investment Company

An investment company is a corporation, trust, or partnership that invests pooled shareholder funds in securities and other assets in accordance with the terms of reference, regulations, and objectives of the entity. Examples of investment companies include mutual funds, closed-end funds, and unit trusts (however in the strictest sense of the definition a unit trust is a trust, not a company/corporation). There are a wider range of options for structuring investment funds, and these options may be limited or mandated by local regulations and practices. It is important to understand what type of entity you are investing in and what rights and obligations you are entitled to as an investor in the fund.

Synonyms: Mutual fund, Unit trust, Closed end fund, Investment fund, Collective investment vehicle
 
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