Are UIT holdings professionally selected and diversified?
Yes. The securities in a UIT, which are listed in its prospectus, are professionally selected to meet a stated investment objective such as growth, income, or capital appreciation. UITs employ a “buy-and-hold” investment strategy: once the trust’s portfolio is selected, its securities typically are not traded (some UITs may sell or replace a security if questions arise concerning the financial viability of the issuer or the security’s creditworthiness). A UIT holds a diversified portfolio of securities to reduce an investor’s risk.
