investment companies
At the present time, there are investment companies of the closed and open type.
Investment company of the closed type shall carry out issue of shares immediately in a certain quantity. The new buyer can buy them only from the former holders of at the market price. Investment company of the open type, which are called mutual funds that issue their shares gradually, certain portions mainly for new customers. These shares may be transferred or resold. More convenient organizational form of the company of open type, because of constant issue allows them all the time to increase their capital and thus constantly increase its investments in the securities of the Corporation. In General, the organizational form of investment companies of open and closed types is based mainly on the stock form.
The peculiarity of investment companies is the fact, that among buyers of their securities increases the share of financial institutions and trade-industrial corporations. Each investor of the investment Fund shall be obliged to pay a Commission when buying for his shares and the management of the contribution. The fee varies by company and depends on their financial strength and reputation. It should be noted that in the post-war period in the developed capitalist countries, the most quickly developing companies of the open type (mutual funds).
The basis of the passive operations of investment companies are received cash from the sale of equity securities, share capital, the reserve Fund, property of the company.
Active operations of investment companies are specific and different from similar operations other credit and financial institutions. The main cash proceeds from sale of Treasury shares, the investment company of both types of investing in the shares of the various corporations and companies. 80% of the assets of investment companies are shares, and in recent years, moreover, they invest in corporate bonds. There is a specialization of investments, some companies are concentrating their investments in ordinary shares, others - in the preference, the third - in the notes. In addition, there are sectoral specialization, when companies acquire securities, for example, only railway companies or machine-building, automotive, electronic corporations.
At the same time, mutual funds money market began to conduct and expand some of speculative operations. So, they began to be used as the company to store the interest payments and dividends in anticipation of reinvestment. In addition, many individuals, who themselves to dispose of their assets, have the right to open here's own stock account (share accounts). This allowed the shareholders fairly quickly and free of charge to transfer funds from the accounts of mutual funds money market depending on the situation on the account of the investment funds, engaged in investments in long-term securities.
