Unit Investment Trusts

A Unit Investment Trust (UIT) is a registered investment company that generally purchases a fixed portfolio of stocks, bonds, or other assets that is intended to be held static throughout the life of the UIT. Investors purchase units of the trust, which represent an undivided ownership in the entire portfolio. Investors typically pay initial and deferred sales charges. Unit investment trusts have stated maturities that generally range from 13 months to as many as 30 years, depending on the type of holdings in the portfolio. Unit holders have different options when these trusts mature, including taking the proceeds in cash or reinvesting into another trust.

UITs invest for various risk levels and invest in both equity and fixed income portfolios. Some of the benefits of UITs include the professionally selected portfolios that are researched thoroughly prior to purchase and then left unchanged, thereby minimizing oversight and reducing tax liability.