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Trading and Investment Terms

Investment Company

This is related to investment trusts, closed-end funds, or closed-ended, only exist to invest.

An investment company is also known as a "fund company" or "fund sponsor." 

They often partner with third-party distributors to sell mutual funds.

They make a profit by buying and selling shares, property, and other assets. 

An investment manager decides what assets to buy to build a diverse, managed portfolio.

You’re not investing alone. Different people contribute money to the company. 

When you invest you become one of its shareholders. 

This means investment companies are a type of collective investment fund, like unit trusts.


 With an investment company:

  • you gain access to a wider range of investments than you could normally buy yourself
  • your investment is managed by an expert fund manager
  • depending on the company you choose, you can invest in specific markets, industries or even small unlisted businesses which are at an early stage in their development

There are over 400 investment companies, many of which have existed for more than 50 years. They include:

  • Investment trusts
  • Offshore investment companies
  • Venture Capital Trusts (VCTs)
  • Split capital investment companies