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An investment product that consists of a diversified basket of income-producing securities sold to investors in $1000 units is referred to as a unit investment trust (UIT). The main difference between a UIT and a mutual fund is that a UIT is not actively managed. UIT portfolios containing tax-exempt municipal bonds or mortgage-backed securities purchased and held to maturity are popular with investors who desire a predictable income stream, capital preservation and tax benefits. The life span of a UIT typically ranges from 10 to 30 years. Investors receive quarterly or monthly income over the life of the UIT as well as payments of portfolio principal as the bonds mature. The market value of a UIT fluctuates with the value of the underlying securities and with changes in interest rates.

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