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Investing July 26, 2002
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.
Reported by Fred Schneyer
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.
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.