Unit investment trusts (UITs)
Key Points
- UITs are pooled investment products with a fixed portfolio of securities to be held until the defined termination date.
- Securities in a UIT portfolio are selected by professionals based on analysis and research.
- UITs offer access to a variety of investing styles, sectors and asset classes.
A UIT is a pooled investment vehicle in which a portfolio of securities is deposited into a trust. Units can be purchased until the initial offering period closes, however a fixed income UIT may close early due to all the units being sold.
UITs employ a “buy and hold” investing philosophy — they invest in a fixed portfolio for a predetermined period of time. The portfolios can be comprised of a variety of securities including, but not limited to, equities and/or bonds.
UITs are subject to many of the same federal laws and oversight by the U.S. Securities and Exchange Commission (SEC) as mutual funds and closed-end funds.
Characteristics of UITs
- Known portfolio — The securities within the trust are known on the deposit date. Typically, these investments will not change over the life of the trust.
- Professional portfolio selection — Securities in the trust are selected based on the investment objectives of the trust and on various analysis and research.
- Diversification — UITs provide access to a wide variety of investment styles, sectors and asset classes.
- Defined investment horizon — UITs have a stated termination date; investors can choose to receive the proceeds in cash or to roll into another UIT.
- Daily liquidity — Units may be redeemed on any business day at the redemption price (may be more or less than purchase price).
- Reinvestment options — Most trusts allow investors to reinvest distributions with no associated sales charge.
Take the next step
To find out more about trading UITs in your investment portfolio, contact your Ameriprise financial advisor or locate an advisor near you.
Investors should consider the investment objectives, risks, charges and expenses of a unit investment trust (UIT) carefully before investing. There may be special or additional risks associated with the UIT, depending on the focus or strategy of the UIT. For a free prospectus, which contains this and other important information about each UIT, call Ameriprise Financial at 1.800.297.7378. Read the prospectus carefully before you invest.