Unit Investment Trusts are established by investment companies for the purpose of selling shares of a fixed portfolio of municipal securities to the general public.

After the trust is created and the initial shares are sold, there is generally not a secondary market. That is, once created, shares in a Unit Investment Trust are usually held by the individual investor for the duration of the trust or are sold back to the trust itself, at which time they are retired.

The administration of the trust is usually assigned to a bank because the portfolio in the trust is passive. Securities are chosen initially and retained for the duration.

There is frequently a sales charge on entry only and no additional management fees are charged.

Investing in a Unit Investment Trust provides you with all the advantages of investing in the underlying securities (municipals) with the additional advantages of diversification and liquidity.

Note: Some bonds may be classified as non-essential, which causes the interest income to be a tax preference item for calculating the alternative minimum tax.