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UIT

Unit investment trusts (UITs)

Featuring low minimums, UITs are investment companies allowing retail investors the chance to buy “units” of a defined portfolio of stocks, bonds or other securities. Units may be bought and sold during any trading day and are priced at the end of the day, as with mutual fund shares. In a low interest rate environment, this is another attractive option for yield-hungry investors, as many of the popular UITs build their portfolios with the goal of generating dividend income. UITs don’t engage in active trading; they are in business to buy and hold until the UIT’s planned termination date (which is set when the trust is created).