Regulated Investment Company - RIC
Whales, dingoes, antelope, flying squirrels, aardvarks, and woolly mammoths...these may seem like very different creatures, but they all fall under one category in animal taxonomy: they're all mammals.
The term "mammal" represents a general term covering myriad beasts, some of which share only a slight external resemblence. Similarly, a regulated investment company is an umbrella term that includes a lot of popular investment vehicles. Mutual funds, ETFs, REITS, etc. can all fall under the title of RIC.
The underlying similarity comes from an IRS distinction. Tax authorities have approved the setup to pass through taxes to individual investors. The taxes aren't paid at the corporate level. The dividends, capital gains, and interest earned all get passed through to the investors, who then pay taxes on an individual basis.
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Finance: What is a Private Investment Co...3 Views
Finance a la shmoop what is a private investment company Shh we are hunting [Elmer Fudd appears from a bush]
profits okay people it's private yes private private means not subject to
the onerous rules of public investing and all that regulation that is when [Definition of a private investment company]
it's only wealthy big boys and girls putting in their dough the presumption [Wealthy people giving money to the market]
is that they have their own lawyers their own risk tolerances their own Ivy
League education and they can figure out the deal on their very own they don't
need mama government training wheels the way the public does in public offerings [The public riding a bike as the stabilisers are taken off]
with publicly traded securities and so on like private wealthy educated
investors get treated differently than Jo farmer who you know just graduated [Guy talking as Elmer Fudd keeps appearing in the background]
high school so who all does this apply to like what's a private investor what
investment vehicles are involved well hedge funds you know those go to private
wealthy investors private equity funds same deal and venture capital funds same
deal why because they go bankrupt all the time you can lose all your money in [Money going down the toilet]
these things all the time and it happens and Joe Q public needs to be protected
from that and there's good and bad because in these funds also you can make [The government saves the public from a fire breathing dragon]
like a hundred times your money if you happen to win the one lottery ticket [Guy next to pile of money from Amazon stock]
that goes up a whole lot and that's what people focus on when they sell them so
Joe Q public at least according to government is to be protected from such
a volatility and there's other investment vehicles beyond these three
that get private attention away from the public but they have vehicles we can't [Elmer Fudd whispering]
tell you about