Unit trusts and unit investment trusts?

Tiglath

Hi - I'm wondering if anyone can shed any light on the difference? The personal dealing policy at work says I don't need pre-clearance for funds, ETFs and UITs. From what I've just read, UITs are a kind of American mutual fund (open-ended), whereas an investment trust is a close-ended listed company. I'm going to check with work tomorrow, but am just wondering if I'm understanding correctly that ITs and UITs are not the same thing?

jimjames

I think the terminology is muddled. In the UK there are:

Unit trusts
OEICs
Investment trusts
ETFs

Unit trusts and OEICs are pretty much the same open ended structures, the manager can create new units as they wish and they are the ones who you buy and sell from.

Investment trusts and ETFs are bought and sold on the stock market. They are closed ended so a fixed number of shares are issued. I'm not aware of any such product as a unit investment trust.

Tiglath

Thanks - I'm with you on the UK stuff. I work for a non-UK bank so I'm guessing they specified UITs for the US employees in the global policy. I'd not heard of UITs until today:

http://en.wikipedia.org/wiki/Unit_investment_trust

UITs seem to be a third kind of US mutual fund, separate from open-ended and close-ended. Not really relevant to the UK, but it did confuse me