What is a key difference between equity UITs and bond UITs?

A key difference between equity UITs (Unit Investment Trusts) and bond UITs lies in how they manage their number of issued units. Equity UITs can issue as many units as necessary during their initial public offering (IPO) as they seek to attract investors and accommodate varying levels of demand for shares representing a portfolio of equities. This flexibility in issuing units allows equity UITs to adjust to market conditions and investor interest.

In contrast, bond UITs typically issue a fixed number of units during their IPO, which means their ability to respond to changes in demand is more limited after the initial offering. This distinction underscores an essential operational difference in how these two types of UITs are structured. Understanding these distinctions is vital for investors when considering the characteristics and potential performance of equity versus bond UITs.