Syndicate
Underlying Investment Societies
Underlying investment societies are also collective investment institutions whose specific goal is investing in underlying securities, without having the possibility of reaching a majority of shares in the companies they invest in.
There are important differences between underlying investment societies and underlying investment funds. Societies are anonymous, 5therefore their investors are not participants, as in funds, but shareholders. Capital in underlying investment societies is formed by shares that are usually quoted in the stock market. These societies have their own negotiating branches; thus they do not need managing societies as in funds.
Due that the purpose of the underlying investment societies is to form and manage securities portfolios, they are also called “portfolio societies.”
These societies are also subject to regulations that try to offer investors the maximum guarantee. The investor that holds stocks of underlying investment society can turn them profitable through:
- dividends distributed by these societies
- selling the stock subscription right, when increasing of capital occurs
- selling stocks to other investors
Underlying investment societies are divided in:
- fixed capital underlying investment societies: In this case, capital is determined by statutes, thus, fixed .
- variable capital underlying investment societies: These are societies whose social capital fluctuates from a minimum amount to a large amount established in the statutes.
Quoting of stocks of underlying investment societies becomes easier compared to the rest of stocks.