Investing March 21, 2001

UITs Add Another $3.5 Billion in February

March 21, 2001 (PLANSPONSOR.com) - Unit investment trusts pulled in another $3.52 billion in February, and now total $7.82 billion according to the Investment Company Institute (ICI).

Reported by

Nevin E. Adams

Unit investment trusts are registered 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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Deposits to equity trusts totaled $3.40 billion during the month, lifting the total to $7.55 billion in 2001. Tax-free bond trusts issued shares in February with deposits of $78.2 million for a total of $183.8 million in 2001. Shares issued in February by taxable bond trusts reached $41.5 million, for a total of $87.5 in 2001.

There were 13 new tax-free bond trusts issuing shares in February, one new taxable bond trusts, and 52 new equity trusts, according to ICI.

Long-term bond trusts having an average weighted maturity of more than 15 years were the most commonly offered in February, with $87.3 million in shareholder deposits.