UK Accounting Glossary
A diversified investment company is an investment fund that adheres to a diversification strategy by investing in a wide array of securities and companies. A diversified investment company is different from other investment companies in the way of its regulated investment structure. According to the Investment Company Act legislated in 1940, a diversified investment company may not invest more than five per cent of its sum capital in any single securities issuer. Additionally, the Investment Company Act prohibits any given diversified investment company from holding more than ten per cent of outstanding voting shares of any company. In all other respects, a diversified investment company is similar to other investment firms. Much like its counterparts, a diversified investment company invests on behalf of small and individual investors. Similarly, still, a diversified investment company may also be an open or close end organization.
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This glossary post was last updated: 9th February 2020.