It's evident that capital is one of the most pivotal and essential need for a developing society that can be fulfilled through financial instruments and institutions including capital or money markets.

Investment companies which have more than 80 years of experience are part of the capital market that attract people’s savings in the framework of a financial institution, and transfer it to economic sectors to pave the way for economic growth.

Formation of investment companies in Iran was almost coincident with the establishment of the capital market. Investment companies gradually promoted and strengthened the new market. They had pivotal role, maybe for lack of modern instruments and institutions at that time.

Here, the researcher makes attempts to analyze investment companies of Tehran’s security exchange during 1997 to 2000 under careful consideration of money and capital markets and related theories such as (Marquits portfolio theory)

In this analysis, the companies are ranked according to time structure, process of establishment, role risk and return to answer the two important questions:

1.     How were performances of investment companies in Tehran’s stock market during 1997 to 2000?

2.     Did they have good performance or not?

Then, the performance of the sample companies is evaluated by using Sharp index and with regard to the research theories, and finally operational and enforceable suggestions are offered for better performance of investment companies.

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