Diversified Investment Company Law and Legal Definition

A diversified investment company is an investment company that adheres to a diversification strategy by investing in a wide array of securities and companies.

Pursuant to the Investment Company Act, 15 USCS § 80a-1, a diversified investment company may not invest more than five percent 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 percent of outstanding voting shares of any company. Thus, a diversified investment company invests 75% of its total assets so that no more than 5% is invested in the securities of any one company.