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| esquire415 |
 Posted: Thu Sep 20, 2007 1:13 pm Post subject: FTEOPX - First Trust 1163 Emerging Opportunites Fund |
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| So what is a unit investment trust? How is this different from a mutual fund? Is this being traded in the sotck exchange and can be bought through a broker? FTEOPX invests in the BRIC countries. |
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| Dave Rathbun |
| Posted: Thu Sep 20, 2007 4:40 pm Post subject: |
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CFO
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From Investopedia:
| Quote: | A registered trust in which a fixed portfolio of income-producing securities are purchased and held to maturity. Commonly used with municipal bonds, investors receive an undivided interest of the portfolio's principal as well as income proportionate to the amount they invested.
Each unit typically costs $1,000 and is sold to investors by brokers. UITs can be resold in the secondary market. |
So it sounds similar to a closed-end mutual fund, where the initial shareholders can buy / sell their shares based on a demand (or lack thereof) for those shares.
The way I read it, you are buying a share of a closed fund. The fund starts with X dollars, and then it's closed. Like a bond there is a maturity date. So, if the fund does well, you can sell your shares "early" (prior to the maturity date) based on the underlying value.
But at some point the trust will disolve and pay out the shareholders and cease to exist. A mutual fund can - in theory - go on forever. |
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