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Unit investment trust

• Money invested in a portfolio whose composition is fixed for the life of the fund. Shares in a unit trust are called redeemable trust certificates, and they are sold at a premium above net asset value.

• Is an investment vehicle which is funded at the beginning and once investments are acquired acts like a liquidating investment. For example, corporate bonds, sovereign bonds, or mortgage backed securities would be acquired. The interest, principal repayments and accelerated payments would be passed on to the investors. These funds would not be retained by the fund for further investment. It is more nearly analogous to a closed-end fund and different from an open-ended fund.

 
 

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 Embedded terms in definition
 Asset
Composition
Corporate bonds
Corporate bond
Interest
Investments
Mortgage backed securities
Mortgage
Net asset value
Net
Portfolio
Premium
Principal
Redeemable
Securities
Shares
Sovereign
Unit
 
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