UIT's Down in September; Bond Trusts Up

October 22, 2002 (PLANSPONSOR.com) - Unit Investment Trusts' deposits fell during September to $679.6 million from August's $706 million - the second straight decline - but fixed income trusts were up.

That follows August’s downturn to $706 million, down substantially from $1.06 billion in July (See  UIT’s Hit Summer Slump).

According to data compiled by the Investment Company Institute (ICI), September deposits to equity trusts totaled $383 million, down from $478.3 million in August.

Tax-free bond trusts issued shares in September with deposits of $194.6 million, up from $140.7 million   a month previously.  Shares issued in August by taxable bond trusts reached $101.9 million, compared with $87.6 million in August 2002.

There were 68 new trusts issuing shares in September including 35 equity trusts, 29 tax-free bond trusts, and four 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 September   with $245.8 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.