Unit Management Trust Assets Rose 12% For Year Ended in April, to $3.64

Total assets in unit investment trusts hit $3.64 billion at the end of April, a 12% increase over a year earlier, the Investment Company Institute reported.

"It hasn't been a blast-off type year for these products, but it's been a healthy year," said Jack F. Tierney, a vice president with Van Kampen American Capital, a unit investment trust company that markets through banks.

Data from investment institute shows that unit investment trusts drew $532.7 million of fresh assets in April. However, that amount represented a downturn from previous months. In March, these products attracted $852.5 million of assets and in February, they took in $754 million.

Mr. Tierney argued that little should be made of the April fall-off, given the seasonality of these portfolios.

Assets tend to pour into equity unit investment trusts at the beginning of the year as investors roll over funds from terminated accounts into a new ones, he said. Indeed, in January, these products took in a whopping $1.5 billion.

The securities in a unit investment trust portfolio are never traded, which distinguishes these portfolios from mutual funds. Because these trusts are fixed portfolios, investors often enjoy lower management fees that come from more passive investment. Bond trusts also offer more predictable returns than comparable bond mutual funds because the underlying securities - and their coupon rates - don't change.

Through April, assets in tax-free bond trusts hit $1.39 billion, a slight increase over the $1.37 billion these products held a year earlier. Assets in taxable bond trusts were at $517 million, a 10% drop over a year earlier.

Assets in equity trusts hit $1.74 billion at the end of April, a 32% jump over a year earlier.

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