UIT

UIT stands for Unit Investment Trust.

It is an investment company that offers a fixed, unmanaged portfolio, generally of stocks and bonds, as redeemable "units" to investors for a specific period of time. It is designed to provide capital appreciation and/or dividend income.

Unit investment trusts are one of three types of investment companies; the other two are mutual funds and closed-end funds

Each unit typically costs $1,000 and is sold to investors by brokers. UITs can be resold in the secondary market. A UIT may be either a regulated investment corporation (RIC) or a grantor trust. The former is a corporation in which the investors are joint owners; the latter grants investors proportional ownership in the UIT's underlying securities.

Equity UIT is a registered trust in which investors purchase units from a fixed portfolio of equities, which are chosen and managed by a professional money manager. Securities in the trust remain there for the life of the trust, which is most often one year. At that point they can either be liquidated at market value or rolled over into a newer, current version of the trust.

Because investors purchase units of the trust, this investment allows investors to diversify and participate in dividends and capital gains without purchasing a large number of the equities themselves.

There are also various types of equity trust products, allowing investors to choose an investment that closely matches their own risk tolerance and investment goals.