Expectations of Your Securities, Expenses And Income

by David Jenyns on August 1, 2008

What securities do investment companies own? The investor in investment company shares must pay his pro-rata part of the cost of administration, which appears as an operating expense in the company’s accounts.

Costs of administration fall into three general classes: investment supervision, fees for professional services, and miscellaneous expenses.


In the case of open-end companies, as a rule expenses of administration are paid to a company or group that has a administration contract. According to the provisions of the Investment Company Act, a majority of the directors of an open-end investment company must be independent of the company’s sales distribution organization. The law requires that at least 40 percent of the directors of all regulated investment companies must be persons who are neither officers nor investment advisers of the company.

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