A unit investment trust UIT is an investment company that offers a fixed portfolio, generally of stocks and bonds, as redeemable units to investors for a specific period of time.

Unit investment trusts, along with mutual funds and closed-end fundsare defined as investment companies.

Investment companies offer individuals the opportunity to invest in a diversified portfolio of securities with a low initial investment requirement. UITs are sold by investment advisors and an owner can redeem the units to the fund or trust, rather than placing a trade in the secondary market.

A UIT is either a regulated investment corporation RIC or a grantor trust.

A RIC is a corporation in which the investors are joint owners, and a grantor trust grants investors proportional ownership in the UIT's underlying securities. Investors can redeem mutual fund shares or UIT units at net asset value NAV to the fund or trust either directly or with the help of an investment advisor. NAV is defined as the total value of the portfolio divided by the number of shares or correlation between bond yields and stock market outstanding and the NAV is calculated each business day.

UNT Stock Price - Unit Corp. Stock Quote (U.S.: NYSE) - MarketWatch

On the other hand, closed-end funds are not redeemable and are sold in the secondary market at the current market price. The market price of a closed-end fund is based on investor demand and not as a calculation of net asset value.

Mutual funds are open-ended funds, meaning that the portfolio manager can buy and sell securities in the portfolio.

Unit Investment Trust (UIT)

The investment objective of each mutual fund is to outperform a particular benchmarkand the portfolio manager trades stock market uit to meet that objective.

Many investors prefer to use mutual funds for stock investing so that the portfolio can be traded.

If an investor is interested in buying and holding a portfolio of bonds and earning interest, that individual may purchase a UIT or closed-end fund with a fixed portfolio. A UIT, for example, pays the interest income on the bonds and holds 2005 ford f150 fx4 hp portfolio until a specific end date when the bonds are sold and the principal amount is returned to the owners.

A bond investor can own a diversified portfolio of bonds in a UIT, rather than manage interest payments and bond redemptions in a personal brokerage account. Dictionary Term Of The Day.

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* UIT (Stock market) - Definition,meaning - Online Encyclopedia

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ICI - A Guide to Unit Investment Trusts

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