What makes UITs different?
What makes UITs different?
A predetermined lifespan
A predetermined lifespan (commonly 15 or 24 months for equity UITs1), after which the UIT terminates or matures.
No active management of the portfolio
No active management of the portfolio, meaning the underlying securities generally do not change during the life of the trust.
Complete transparency in terms of their portfolio holdings at all times.
UITs may enable investors to add another dimension to their overall investment strategy.
Key features of the UIT structure include:
Because the underlying holdings in a UIT are 100% transparent, investing in a UIT can help investors take greater control of their overall investment exposures.
The investments in a UIT generally remain fixed once the trust has been created ensuring adherence to its stated objectives, and thereby removing emotion from the investment process.
Low costs and taxes.
With limited portfolio turnover, UITs don’t typically incur the level of trading or rebalancing costs and embedded taxable gains that other investment vehicles may experience.
No “cash drag” on performance.
Whereas other investment vehicles may keep cash sitting on the sidelines, UITs are typically fully invested in the market, so your investment dollars are always at work.
Defined time horizon.
Since many UITs are short-term investments, they empower investors to express their own sense of where the market is heading in the immediate future.
Potential rollover option at termination.
At the end of the trust’s term, an investor’s options often include being able to “roll” all or a portion of their money into a new UIT at a reduced sales charge.2
Why Eaton Vance?
Why Eaton Vance?
At Eaton Vance, we’ve been helping investors navigate challenges in the financial markets for nearly a century. Our focus is on delivering the tools our clients need to pursue their goals in the market climate they’re facing.
UITs are an extension of the work we’ve been doing since 1924. Given today’s market environment, UITs are a natural next step in expanding the ways investors can tap into innovative investment ideas and proven industry leadership.
Eaton Vance’s UITs feature the same independent thinking and research you’ve come to expect from our other products. We believe that offering a range of choices puts our clients in a position to find the best opportunities for their situation.
1 Bond/fixed-income UITs have a typical lifespan of 1-30 years, terminating when the last bond in the portfolio matures or is otherwise redeemed by the issuer.
2 Rollover option is typically available for 30 days after the UIT’s termination date. Other options available to unitholders at termination may include taking all or a portion of their money outright and (under certain circumstances) taking their pro rata portion of the underlying securities in an in-kind distribution. Each of these scenarios entails tax consequences.
Unit investment trusts are unmanaged portfolios and the underlying securities are not intended to change throughout a life of a portfolio. The market value of the underlying securities will fluctuate and subsequent market value of a portfolio will reflect such daily pricing. Accordingly, investors in a portfolio may lose money and, units, when redeemed, may be worth more or less than their initial investment. An investment in a portfolio should be made with an understanding of the risks associated with an investment in common stocks including the risk that the financial condition of the issuers of the securities or the general condition of the stock market may worsen. The value of the securities held by a portfolio may be subject to steep declines or increased volatility due to changes in performance or perception of the issuers. Dividends are not ensured. Dividends are only paid when declared and will vary over time. A portfolio concentrated in one or more sectors will be more impacted by developments in such sectors and may be more highly susceptible to any economic, political or regulatory occurrences affecting these sectors than a more broadly diversified portfolio. Diversification does not constitute a guarantee of profit or eliminate risk of loss. Consider the tax consequences associated with rolling your investment in successive portfolios, if available.
Other investment vehicles and unit investment trusts are purchased and sold differently and have different costs and expenses. These differences, among others, may result in significant disparity in performance. For further information, please review the relevant prospectuses.