What Is Unit Trust
A unit trust is a fund which adopts a trust structure.
What is unit trust. In this guide the term fund will also refer to a unit trust. A unit trust pools investors money into a single fund which is managed by a fund manager. A unit investment trust uit is an investment company that offers a fixed portfolio generally of stocks and bonds as redeemable units to investors for a specific period of time.
A unit trust is an open ended grouped investment product which means there is no limit to how many people can invest in it or how much can be invested. Investment linked insurance policies ilps are another way to invest in funds. Not all funds use a trust structure.
A unit trust is an unincorporated mutual fund structure that allows funds to hold assets and provide profits that go straight to individual unit owners instead of reinvesting them back into the. Unit trusts are investment products and some may involve derivatives. An sec registered investment company which purchases a fixed unmanaged portfolio of income producing securities and then sells shares in the trust to investors.
The major difference between a unit trust and a mutual fund is that a mutual fund is actively managed while a unit investment trust is not managed at all. Unit trusts versus ilps. You buy units with the investment you make in a unit trust.
Unit trusts offer access to a wide range of investments and depending on the trust it may invest in securities such as shares bonds gilts and also properties mortgage and cash equivalents.
