Unit Investment Trust (UIT)
A trust, registered with the SEC under the Investment Company Act of 1940, in which a fixed portfolio of income-producing securities are purchased and held to maturity. This type of investment vehicle is commonly used with municipal bonds. Each unit usually costs $1,000 and is sold by brokers to investors for an average load of 4%. Investors receive an undivided interest of the portfolio’s principal and income proportionate to the amount they invested. All unit investment trusts are redeemable securities and can be resold in the secondary market.
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