The Unit Investment Trust (UIT)

The unit investment trust is a type of investment that provides you with a way to buy multiple securities. This investment carries with it some benefits. Here are a few things to consider about the unit investment trust and what it can do for you.

Unit Investment Trust

The unit investment trust offers investors a way to purchase a share of a portfolio of securities. This portfolio could be made up of stocks, bonds or other securities. The unit investment trust has a specific life attached to it. Therefore, after a certain point, all of the securities in the unit investment trust will be liquidated.

Difference from Mutual Funds

At first glance, the unit investment trust seems very similar to a mutual fund. While they do share some common features, there are a few key differences. With the unit investment trust, you are not benefiting from professional management. No one is buying or selling securities within the unit investment trust. You simply purchase the unit and then hold it for a predetermined amount of time. In addition to the lack of professional management, unit investment trusts have a defined length. Mutual funds do not have a time limit on their investments. Mutual funds are designed to last forever.

Selling Unit Investment Trusts

This type of investment is put together by an investment company or sponsor. The investment is then distributed to brokers in order to sell to the general public. After an initial offering period, you will not be able to purchase shares of the unit investment trusts any more. Typically, they will make the investment period available as long as it takes to sell all of the shares.

Capital Appreciation

One type of unit investment trust seeks to provide capital appreciation for the investors. This is typically the goal of unit investment trusts that invest in stocks. The unit investment trust will purchase stocks that they believe will appreciate in value over the time period of the unit investment trust. At the end of the term, the trust will then sell all of the shares of the stock and provide the gains to the investors. This type of unit investment trust is perfect for those who wish to grow their portfolio over the long term.


Another type of unit investment trust involves those that produce income for shareholders. This type of unit investment trust typically purchases bonds as the underlying investment. Corporate bonds pay their owners a regular monthly interest payment. These payments are collected by the unit investment trust and then distributed to the shareholders in the trust. This can provide a fairly consistent and regular source of income for those that invest in unit investment trusts. This is a solid investment for anyone who wants to preserve capital and create some type of extra income for him- or herself. This type of investment is often sought out by retirees or those nearing retirement.

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