Esponel (es)
Türkçe (tr)
Russian (ru)
한국인 (kr)
Italiano (it)
हिंदी (in)
عربي (ar)
Français (fr)
Deutsch (de)
日本 (jp)
中国人 (cn)
CandleFocus Glossary Editor.png)
A widely held fixed investment trust (WHFIT) is a type of structured investment vehicle used by investors to invest in a portfolio of stocks, bonds and/or real estate mortgages. WHFITs are most often created when the interests of multiple investors, professional third-party custodian, and the investment advisor align. The custodian ensures the WHFIT is being managed in accordance with the trust agreement, while the investment advisor handles the day-to-day activities such as portfolio management and trading.
WHFITs are sometimes referred to as UITs, which are also structured investments, but do not involve any third-party custodians. By definition, unit investment trusts require publicly traded securities, whereas WHFITs may include private instruments like single-family mortgages.
One primary benefit of a WHFIT is diversification. A diversified portfolio of securities or real estate mortgages provides an effective way for investors to reduce risk and increase return potential. Diversification is accomplished by spreading the portfolio's investments among different asset classes or economies, as well as across different types of investments within each asset class.
WHFITs are also beneficial for investors who lack the time or resources to manage their own investments. With a WHFIT, the investor delegates the portfolio management duties to an investment advisor, while securities held in the trust are held in a custodial account by a third-party custodian. The custodian is responsible for ensuring all of the trust’s investments are managed in accordance with the trust agreement.
However, it’s important to note that WHFITS are not without their own risk factors. Since WHFITS are not publicly traded, they tend to be less liquid than more traditional investments. In addition, they also tend to have higher management fees and costs than other forms of investments. Therefore, when considering a WHFIT, it’s important to weigh the pros and cons carefully to determine if it is the best fit for your long-term investment goals.
WHFITs are sometimes referred to as UITs, which are also structured investments, but do not involve any third-party custodians. By definition, unit investment trusts require publicly traded securities, whereas WHFITs may include private instruments like single-family mortgages.
One primary benefit of a WHFIT is diversification. A diversified portfolio of securities or real estate mortgages provides an effective way for investors to reduce risk and increase return potential. Diversification is accomplished by spreading the portfolio's investments among different asset classes or economies, as well as across different types of investments within each asset class.
WHFITs are also beneficial for investors who lack the time or resources to manage their own investments. With a WHFIT, the investor delegates the portfolio management duties to an investment advisor, while securities held in the trust are held in a custodial account by a third-party custodian. The custodian is responsible for ensuring all of the trust’s investments are managed in accordance with the trust agreement.
However, it’s important to note that WHFITS are not without their own risk factors. Since WHFITS are not publicly traded, they tend to be less liquid than more traditional investments. In addition, they also tend to have higher management fees and costs than other forms of investments. Therefore, when considering a WHFIT, it’s important to weigh the pros and cons carefully to determine if it is the best fit for your long-term investment goals.