What type of fund is a UITF?

A Unit Investment Trust Fund (UITF) is classified as a pooled investment fund. This means that it collects money from multiple investors and pools those funds together to invest in a diversified portfolio of assets. The primary goal of a UITF is to provide investors with an opportunity to invest in a managed portfolio, which they might not be able to access individually due to higher capital requirements or lack of expertise.

Pooled investment funds like UITFs allow for economies of scale, as the combined investment capital can be used to buy a wider range of securities or different asset classes, thus spreading risk across various investments. Investors in a UITF own units in the fund rather than directly owning the underlying securities, which makes it a more accessible investment option for those looking to diversify their portfolios without needing to manage the investments themselves.

Other options, such as closed-ended funds, exchange-traded funds, and hedge funds, represent different structures and characteristics in the world of investment, which do not fit the specific definition of a UITF as a pooled investment fund formed by the collective contributions of multiple investors.