An investment company refers to an enterprise organization that collects a large amount of funds and makes a reasonable combination according to its investment objectives. Investment companies in a broad sense include trust and investment companies, finance companies, investment banks, fund companies, commercial banks, investment departments of insurance companies and other financial institutions, as well as various enterprises engaged in property rights investment and securities investment. Its business scope includes buying stocks and bonds of enterprises, participating in the establishment and business activities of enterprises, providing medium and long-term loans, managing domestic and foreign government bonds and fund management. The main source of funds is to issue its own bonds, stocks or fund units, obtain loans from other banks and accept entrusted deposits. In a narrow sense, an investment company refers to the main body of a legal person investment fund and is a profit-making joint stock limited company established according to law. Investors become shareholders by buying shares in the company, and the shareholders' meeting chooses an investment management company to manage the company's assets.
From a global perspective, almost all funds in the United States are corporate, while Japanese, Korean and Taiwan Province investment funds are contractual. At present, funds that have been listed or traded over the counter in China are all contractual closed-end funds, and corporate funds have also appeared in China. For example, when 1992 was established, Shenzhen Nanshan Fund operated in a closed mode of company system, and was reorganized into a closed mode of contract in May of 1996.
As a pool of funds for investors, investment companies conduct professional investment management. The important functions of companies that diversify risks and improve returns in the securities market are as follows: ① As institutional investors, it is conducive to the stability of the securities market and makes the market develop in an orderly direction. As an important investment method, it can improve the investment structure of the securities market and promote the deepening of financial reform. Nowadays, the penetration of investment funds into the securities market has far exceeded that of other financial products. Take the United States as an example 1992, about 96% of the new funds injected into the stock market in the United States came from investment funds. At present, 25% people in the United States participate in the fund market, with a total investment of 800 billion US dollars. Investment companies attract more people to enter the securities market, making personal assets appear more in the form of intangible financial assets, and strengthening the role of finance in social and economic life. As an international investment carrier, investment companies are conducive to promoting the internationalization of the securities market. For example, some newly industrialized countries, such as South Korea, Singapore and Thailand, have set up national investment companies to attract foreign investment in ten domestic securities markets, which not only attracts foreign investment, but also helps to realize the integration of domestic securities markets with international securities markets.