unit investment trust (UIT) definition

unit investment trust (UIT)

Type of the US investment company that invests in a fixed portfolio of securities which are resold to investors through brokers as redeemable certificates (representing undivided interest) called units. This arrangement allow unit-holders to build a diversified portfolio at a cheaper price, and to receive income in proportion to their individual investments. It is basically a closed end mutual fund, and expires either on a fixed date or (in the case of bonds) on the security's maturity date.

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