Click here to read the original article on ETFdb.com.
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Unit Investment Trusts (UIT): An Introduction
April 30, 2014 at 07:00 AM EDT
By now, most investors are familiar with exchange-traded funds (ETFs), as they have become some of the most popular securities currently on the market. There are, however, fewer investors who are familiar with unit investment trusts (UITs) despite the fact that some of the most popular ETFs in the world are actually structured as UITs. Take the SPDR S&P 500 ETF (SPY), one of the largest funds in the world; underneath the hood, it is actually a UIT. What Is a UIT? A UIT usually issues redeemable units for investment. In ETFs, these shares are only redeemable in large baskets, say 100,000 shares for example. Like all indexed ETFs, a UIT does not actively trade its underlying securities, but instead buys a fixed portfolio like the S&P 500. As far as investment, expenses, dividends, trading, and liquidity are concerned, UITs are structured and behave nearly identically to ETFs. When it […] Click here to read the original article on ETFdb.com. Related Posts: The Most Successful ETFs Of All-Time March ETF Stats: Another Solid Quarter 101 #ETFFunFacts The Best and Worst All-ETF Portfolios of 2013 5 Tweets That Shook the ETF World
By now, most investors are familiar with exchange-traded funds (ETFs), as they have become some of the most popular securities currently on the market. There are, however, fewer investors who are familiar with unit investment trusts (UITs) despite the fact that some of the most popular ETFs in the world are actually structured as UITs. Take the SPDR S&P 500 ETF (SPY), one of the largest funds in the world; underneath the hood, it is actually a UIT. What Is a UIT? A UIT usually issues redeemable units for investment. In ETFs, these shares are only redeemable in large baskets, say 100,000 shares for example. Like all indexed ETFs, a UIT does not actively trade its underlying securities, but instead buys a fixed portfolio like the S&P 500. As far as investment, expenses, dividends, trading, and liquidity are concerned, UITs are structured and behave nearly identically to ETFs. When it […]
