A Non-Fixed UIT, or unit investment trust is a type of UIT that allows changes in the portfolio and traditionally invest in mutual fund share. The non fixed UIT is classified as an investment company under The Investment Company Act of 1940. The purchaser of the UIT units must receive a prospectus for the UIT as well as a prospectus for the mutual funds contained in the portfolio.
Applying "Non-Fixed UIT" to Securities Exams:
Non-Fixed UITs will purchase mutual fund shares and hold the mutual fund shares in the UIT. This is unlike a fixed UIT that purchases bonds and holds the bonds until maturity. Non fixed UITs may also be known as contractual plans. The UIT issues redeemable units to investors and must stand ready to redeem the units and forward the proceeds upon request of the investor. One of the main reasons an investor would purchase shares of a mutual fund through a unit Investment trust is because the mutual funds contained in the UIT portfolio have substantial minimums that most retail investors cannot mean.