What is a unit investment trust?

Unit investment trusts, along with mutual funds and closed-end funds, are defined as investment companies. A unit investment trust (UIT) is a U.S. financial company that buys or holds a group of securities, such as stocks or bonds, and makes them available to investors as redeemable units.

Can A UIT invest in a Bond Trust?

Although UITs can invest in a variety of securities, most are typically either stock or bond trusts. Stock unit investment trusts can focus on capital appreciation, dividend income, or both. Stock trusts are more vulnerable to market risks, making them less steady and less predictable than bond trusts.

What is a UIT investment portfolio?

A UIT buys a relatively fixed portfolio of securities (for example, five, ten, or twenty specific stocks or bonds), and holds them with little or no change for the life of the UIT. Because the investment portfolio of a UIT generally is fixed, investors know more or less what they are investing in for the duration of their investment.

What does an investment trust do?

They write new content and verify and edit content received from contributors. investment trust, also called closed-end trust, financial organization that pools the funds of its shareholders and invests them in a diversified portfolio of securities.