Unlike mutual funds, in which the portfolio is actively managed and traded and continuously changes, defined portfolios generally remain fixed for a predetermined period of time. Defined Portfolio investors earn income derived from interest or dividends paid on the securities that make up the trust's portfolio. When the trust matures, the securities held in the trust are liquidated and the proceeds are distributed to the unitholders. Defined portfolios consist of highly researched, diversified portfolios of securities selected by experienced financial professionals.
Investors know up-front what securities make up the investment portfolio.
Low minimum investment. Modest fees and expenses. Otherwise, because the securities in UITs are not actively traded, there are no transaction, marketing or liquidation fees. Defined portfolios may be sold at any time before maturity. The sale price may be higher or lower than the original purchase price, depending on the current value of the underlying securities in the trust.