Unit Investment Trusts (UITs)

What this video covers

• Why a UIT issues redeemable units, not shares, and what that terminology signals on the exam
• The rule of zero: no board of directors, no investment adviser, and no active management
• How the fixed portfolio eliminates style drift and why zero rebalancing distinguishes a UIT from an index fund
• The set termination date: when it is determined, what happens at liquidation, and how proceeds flow to unit holders
• The UIT cost structure: no separate management fee, one-time creation and sales charge, and low annual trust operating expenses
• Early redemption at net asset value (NAV) through the trust sponsor versus exchange trading
• The two main types of UITs: equity UITs with shorter termination dates and bond UITs designed to match bond maturity dates