Unit Investment Trusts (UITs)

What this video covers

• Why a Unit Investment Trust (UIT) is defined by a fixed, unmanaged portfolio locked in at creation, and what that means for ongoing supervision
• How redeemable units of beneficial interest differ from mutual fund shares, and why the termination date is non-negotiable
• The trustee versus board of directors distinction, and why mixing these up costs points on exam day
• Why UITs charge no management fee, and how the creation or sales charge plus trustee fee replace the mutual fund fee model
• What happens when a bond matures or a security is sold inside a UIT: distribution of proceeds, never reinvestment
• How to distinguish a UIT from a mutual fund when a question describes a pooled investment with a fixed portfolio and a termination date
• Why an actively managed, perpetual vehicle is the wrong recommendation for a client who actually needs a UIT, and vice versa