Unit Investment Trust (UIT)
Candlefocus EditorFor investors who are looking for a hands-off investment approach and are comfortable with less liquidity and flexibility, UITs can be a great option. UITs can also be advantageous for investors who want to potentially diversify across a wide range of securities and don’t want to pay the management fees associated with more actively-managed funds.
UITs are also sometimes attractive to beginning investors because they can provide diversification at a low cost with a minimum investment that is usually much lower than what's required for a mutual fund. They can also be helpful for investors who don't have the resources or expertise to manage their own portfolios.
In summary, a unit investment trust (UIT) is a type of collective investment product that allows investors to put their money into a diversified portfolio of securities and assets with a limited management fee. UITs are typically less liquid and have less flexible portfolio management than mutual funds, but they can offer attractive tax advantages and diversification of investment at a low cost. Ultimately, UITs can be a great option for beginning investors who want to get started on their investment journey with the help of a professionally managed portfolio.