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Unit Investment Trust (UIT)
Term category: General Investing
In 10 words or less: A trust that typically invests in bonds and pays the income to the owners.

Definition: A unit investment trust (UIT) is a trust set up to invest in income securities, such as bonds.  When the securities generate income, it is paid out to shareholders in the trust.  When the bonds have all matured, the trust is dissolved.

Advice: UIT's are commonly sold to investors through brokers.  They're a little bit harder to gain information on but there is a secondary market for these securities as well.

Because municipal bonds typically have large initial purchase requirements, many UIT's are formed to invest in them.  This allows multiple investors to pool their money.

 

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