Unit trust example

What Is a Unit Investment Trust (UIT)?

A unit investment trust (UIT) enables investors to buy into a fixed portfolio of stocks, bonds, and other securities in one transaction. Generally, the trust has a set maturity date or termination date at which the fund will be liquidated, distributing any proceeds to the investors.

UITs are just one of three investment companies that pool investor money to make it easier for people to build diversified portfolios at a lower cost. The other two types are mutual funds and closed-end funds.

Unit trust dividend

Unlike mutual funds, unit investment trusts are not actively traded in the markets. Instead, their underlying securities are held for extended periods and only bought or sold whenever there is a significant change in their underlying investments, such as a corporate merger or bankruptcy.

UITs tend to be associated with more low-risk strategies and are often chosen as long-term investments rather than short-term trading instruments.

How UITs Work

UITs are investment options for those seeking capital growth and income.

They enable investors to gai

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