UIT's Hit Summer Slump

September 17, 2002 (PLANSPONSOR.com) - Unit Investment Trusts' deposits during August slumped to $705.7 million from July's strong showing of $1.3 billion.

According to data compiled by the Investment Company Institute (ICI), deposits to equity trusts totaled $477 million, down substantially from $1.06 billion in July.

Tax-free bond trusts issued shares in August with deposits of $140.7million, compared with $160 million a month previously.  Shares issued in August by taxable bond trusts reached $87.6 million, compared with $77.2 million in July 2002.

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There were 50 new trusts issuing shares in August including 24 equity trusts, 22 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 August, with $177.6 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.