What is an 'Equity Unit Investment Trust'

An equity unit investment trust is a publicly offered, pooled trust fund managed by an investment company.

BREAKING DOWN 'Equity Unit Investment Trust'

Equity unit investment trusts are managed by investment companies and can be offered alongside open-end mutual funds, closed-end mutual funds and exchange-traded funds (ETFs). Unit investment trusts are pooled fund offerings that can be managed to various objectives similar to open-end and closed-end funds as well as ETFs. They can include equities, bonds, commodities and cash equivalents. Equity unit investment trusts will focus their portfolios on stock investments.

While equity unit investment trusts can be managed to similar strategies as other common funds in the market, their structures are significantly different. Their management is regulated by the Investment Company Act of 1940. Equity securities in a unit investment trust are bought and held for the life of the trust. At that point they can either be liquidated at market value or rolled over into a newer, current version of the trust.

Equity unit investment trusts have many unique differences when compared to mutual funds. Equity unit investments trusts will issue a specified number of shares during a scheduled offering period. The products have a definitive duration. Thus, investors who buy the product will receive a distribution at the product’s net asset value on the termination date. The product is liquidated at its net asset value. Often unit holders will receive special options to reinvest their capital in the product’s next iteration, which typically is issued immediately following a termination date.

Investing in Equity Unit Investment Trusts

Equity unit investment trusts are bought and sold from the issuing investment company. They may also be available through some brokerage platforms. Equity unit investment trusts are diversified portfolios and they can distribute dividends and capital gains.

There are various types of equity unit investment trust products available, allowing investors to choose an investment that closely matches their own risk tolerance and investment goals. (See also: Investing in a Unit Investment Trust.)

Invesco

Invesco is one investment company offering a broad array of equity unit investment trusts. One example is the Large Cap Value Strategy which invests in 20 stocks from the S&P 500 Value Index. Its deposit date was January 11, 2018. It had a scheduled primary offering period of January 11, 2018 to April 6, 2018. The unit investment trust has a 15-month term with a termination date of April 18, 2019.

RELATED TERMS
  1. Unit Trust - UT

    A unit trust is an unincorporated mutual fund structure that ...
  2. Qualified Trust

    A qualified trust is a tax-advantaged fiduciary relationship ...
  3. Trust Fund

    A trust fund is comprised of a variety of assets established ...
  4. Bare Trust

    A bare trust is a type of trust that provides beneficiaries with ...
  5. Municipal Investment Trust

    A municipal investment trust is a type of unit investment trust ...
  6. Land Trust

    A land trust is a legal agreement which transfers title of property ...
Related Articles
  1. Retirement

    How To Set Up A Trust Fund In Australia

    No, they're not just for the super-rich. But you need to know the rules.
  2. Investing

    A Look Into Creating a Trust Fund With ETFs (VCIT, SDIV)

    Learn the basics of how a trust works and the two most common types. Discover how to use ETFs to fund a trust and the different strategies.
  3. Financial Advisor

    Irrevocable Trusts: New Trends You Need to Know

    Several improvements and additional provisions have been added to irrevocable trusts in recent years making them considerably more versatile than before.
  4. Financial Advisor

    Advisors: Tips for When to Employ Living Trusts

    Revocable living trusts accomplish estate planning objectives that aren't possible with a will. Here are some of the cases that show when to use a trust.
  5. Managing Wealth

    Pick the Perfect Trust

    Trusts are an estate plan's anchor, but the terminology can be confusing. We cut through the clutter.
  6. Managing Wealth

    How ING Trusts Have Surprising Tax Advantages

    Learn how ING trusts can be used to shield assets from state income taxes and provide additional protection for high-wealth individuals.
  7. Managing Wealth

    When to Trust a Revocable Trust

    Unsure how your assets will be dispersed once you're gone? Here's a revocable trust can help.
  8. Retirement

    When a Revocable Trust Makes Sense

    A revocable trust can play an important role in an estate plan.
  9. Managing Wealth

    Which Retirement Plans Need a Family Trust?

    Many people think family trusts are only for the very wealthy, but if your retirement assets exceed $500,000, you may want to consider the option.
RELATED FAQS
  1. What is the difference between a revocable trust and a living trust?

    Learn how a revocable trust and living trust are two terms used to describe the same thing and what the key provisions are ... Read Answer >>
Hot Definitions
  1. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  2. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  3. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  4. Current Assets

    Current assets is a balance sheet item that represents the value of all assets that can reasonably expected to be converted ...
  5. Volatility

    Volatility measures how much the price of a security, derivative, or index fluctuates.
  6. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
Trading Center