Unit Investment Trust (UIT)

Business / Taxes / Unit Investment Trust (UIT): A UIT may be a fixed portfolio of bonds with specific maturity dates, a portfolio of income-producing stocks, or a portfolio of all of the securities included in a particular index. Examples of the latter include the DIAMONDs Trust (DIA), which mirrors the composition of the Dow Jones Industrial Average (DJIA), and Standard & Poor's Depositary Receipts (SPDR), which mirrors the Standard & Poor's 500-stock Index (S&P 500). Index UITs are also described as exchange traded funds (ETFs). UITs resemble mutual funds in the sense that they offer the opportunity to diversify your portfolio without having to purchase a number of separate securities. You buy units, rather than shares, of the trust, usually through a broker. However, UITs trade more like stocks than mutual funds in the sense that you sell in the secondary market rather than redeeming your holding by selling your units back to the issuing fund. Further, the price of a UIT fluctuates constantly throughout the trading day, just as the price of an individual stock does, rather than being repriced only once a day, after the close of trading. As a result some UITs, though not index-based UITs such as DIAMONDS or SPDRs, trade at prices higher or lower than their net asset value (NAV). One additional difference is that many UITs have maturity dates, when the trust expires, while mutual funds do not. A fund may be closed for other reasons, but not because of a predetermined expiration date.

Other Words for Trust

Trust Noun Synonyms: confidence, reliance, faith, conviction, certitude, certainty, sureness, positiveness, assurance, belief
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Other Words for Unit

Unit Noun Synonyms: element, component, entity, part, item, constituent, piece, portion, segment, section, module
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Registered Investment Adviser (RIA)

Business / Taxes / Registered Investment Adviser (RIA): Investment advisers who register with the Securities and Exchange Commission (SEC) and agree to be regulated by SEC rules are known as registered investment advisers. Only a small percentage of all in MORE

Registered Investment Adviser

Business / Finance / Registered Investment Adviser: SEC-registered individual or firm that substantiates completion of education and work experience in the field, and pays an annual membership fee. MORE

Real Estate Mortgage Investment Conduit (REMIC)

Business / Finance / Real Estate Mortgage Investment Conduit (REMIC): A pass-through tax entity that can hold mortgages secured by any type of real property and can issue multiple classes of ownership interests to investors in the form of pass-through certificates, bond MORE

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