Sunday, December 26, 2010

Unit Investment Trust

A Unit Investment Trust (UIT) is an investment company that offers a fixed, unmanaged portfolio of stocks and bonds, as redeemable units to investors for a pre-determined time frame. When the trust's termination ate is reached the trust is dissolved, and proceeds are paid to shareholders. A UIT can be structured as a regulated investment corporation (a corporation in which the investors are termed joint owners) or a grantor trust (a fund which grants investors ownership in the UIT's underlying securities). UIT is an American term, and these types of funds are established and regulated under US law. In the US there are three broad types of fund: UITs, mutual funds, and closed-end funds.

Synonyms: UIT, Regulated investment corporation, Grantor trust, Investment trust

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