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Investment: An A-Z Guide by Philip Ryland

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U

Unit trust

An investment vehicle with two different meanings depending on which side of the Atlantic you are situated.

• In the UK, a unit trust is the generic name for a MUTUAL FUND.

• In the United States, a unit trust – its full name is unit investment trust – is an unmanaged portfolio of ASSETS, usually BONDS, often with a fixed life in which units of, say, $1,000 a piece are sold. The assets generally remain unchanged. Although redemption of units is possible, it is more likely that the trust’s sponsors will arrange a secondary market in units to avoid liquidating too much of the trust’s portfolio.

Unsystematic risk

The investment risks that can be largely eliminated by holding a diversified portfolio of investments; the ...

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