Which method is commonly used to value the investments of UITFs?

The method commonly used to value the investments of Unit Investment Trust Funds (UITFs) is the marked-to-market basis. This approach values investments based on their current market price, reflecting the most updated information available regarding the assets' worth. This practice is essential for UITFs because their net asset value (NAV) must be calculated accurately for pricing units and determining performance. By using current market values, investors receive a more realistic assessment of their investment's value, which can fluctuate with market conditions.

In contrast, other valuation approaches, such as historical cost basis, would not provide an accurate picture of the current value of the investments since they would only reflect the original purchase price rather than any changes that have occurred in the market. Discounted cash flow analysis focuses on estimating the present value of expected future cash flows and is typically used for more detailed valuations of individual securities rather than for a collective fund. Comparative market analysis involves evaluating similar assets but is not the primary method used for UITF valuation. Thus, marked-to-market is the standard and most suitable method for providing timely and relevant value assessments in the context of UITFs.