Just curious. I get that UIT is a registered investment company but is it an institution?
I am guessing so because it is a registered investment company.
Just curious. I get that UIT is a registered investment company but is it an institution?
I am guessing so because it is a registered investment company.
Hi @FoxMcCloud! Good question!
Just like a mutual fund is considered an institution, a UIT would be as well. An institution is an organization that makes a business out of investing its customers’ money. Similar to how a mutual fund invests its shareholders’ money, a UIT does as a well (during the formation of the UIT; keep in mind these are fixed portfolios that do not change after initially set).
Made sense!
So, just for my clarification, an institution is also another word for a registered investment company, correct?
haha, sorry…I am trying to wrap my head around these word games.
Don’t be sorry - that’s what this forum is here for! Glad you’re asking these questions.
A registered investment company is a type of institution. Just like a Ford Mustang is a type of car, but we wouldn’t say all cars are Mustangs. Any time we have a financial organization investing their customers’ or clients’ money, we consider them an institution. Institutions include:
I hope this clarifies it!
Thank you!
definitely clears things up.