Unit Trust - UT

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What is a 'Unit Trust - UT'

An unincorporated mutual fund structure that allows funds to hold assets and pass profits through to the individual owners, rather than reinvesting them back into the fund. The investment fund is set up under a trust deed. The investor is effectively the beneficiary under the trust.

See also "unit investment trust".

BREAKING DOWN 'Unit Trust - UT'

The success of a unit trust depends on the expertise and experience of the management company. Common types of investments undertaken by unit trusts are property, securities, mortgages and cash equivalents.

In the U.K. the term "unit trust" is synonymous with "mutual fund" as it is used in North America.

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