Unit Trust - UT
Categories: Mutual Funds
The unit trust exists as a kind of cousin to a mutual fund. The two play the same basic function: pooling money for investment purposes. However, the unit trust pays out profits to its holders, while a mutual fund typically reinvests them in the fund.
Structurally, a unit trust represents an unincorporated mutual fund, with a trust deed as its main organizing document. UTs are more popular outside the U.S., especially in the UK, and in former UK colonies like Australia, New Zealand, Canada, South Africa, and Singapore.