What is an investment company

Investment companies are companies engaged in investment activities, that is, raising free cash in the capital market. The capital of such companies is usually represented by securities.

Investment company concept

Investment companies are a relatively new type of financial institution for Russia. And this is not surprising, since investment companies can function normally only in a market economy.

Unlike investment funds, companies only work with securities. They are engaged in the accumulation of funds and their subsequent profitable investment. Investment companies, as a rule, issue their own shares. The proceeds from their sale are invested in shares of enterprises. Accordingly, the income of shareholders of investment companies directly depends on how smartly the funds are invested. A very popular way to invest in Russia is to invest in construction companies.

Also, investment funds can be invested in stocks and bonds of various economic enterprises. The financial risks of investors are significantly reduced, because when the value of some securities falls, the price of others increases. An important advantage for an investor is the receipt of the services of a financial manager, in which the investment company acts. It turns out that the investor risks only with the wrong choice of investment company.