UIT Deposits Slid in June

July 26, 2002 (PLANSPONSOR.com) - Deposits to unit investment trusts totaled $923.8 million in June, down from the previous month's $957.9 million, but a substantial decrease from a year earlier when deposits were $1.29 billion.

According to data compiled by the Investment Company Institute (ICI), deposits to equity trusts totaled $722.8 million in June, compared with $1.13 billion in June 2001.

Tax-free bond trusts issued shares in June with deposits of $140.3 million, compared with $125.9 million a year previously.  Shares issued in June by taxable bond trusts reached $60.6 million, compared with $36.9 million in June 2001.

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There were 53 new trusts issuing shares in June including 22 equity trusts, 26 tax-free bond trusts, and five taxable bond trusts.

In terms of maturity, long-term bond trusts having an average weighted maturity of more than 15 years were the most commonly offered in June, with $164.6 million in shareholder deposits.
Unit investment trusts, or UITs, are investment companies that purchase fixed portfolios of selected stocks or bonds, and hold them through a stated termination date. 

“Units” in the trust are sold to investors, who receive a share of principal and interest, or dividends depending on the underlying investments. Fixed income UITs pay monthly income in contrast to bonds that only pay income semiannually or annually.

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