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