Author Topic: Defined Asset Fund/Unit Investment Trust?  (Read 143 times)

pigpen

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Defined Asset Fund/Unit Investment Trust?
« on: September 10, 2020, 08:46:20 AM »
Investment product question for the gang. My parents have a pricy managed investment account with Merrill Lynch. They have asked that I help them move their investments over to Vanguard/Fidelity. In addition to the mutual funds with front end loads and exorbitant fees their adviser has them in, they also have several Unit Investment Trusts/Defined Asset Funds.

I'm not super familiar with how these work, but they appear to be defined portfolios of stocks/bonds/etc. with a specified investment objective that are packaged and sold as investment products -- with a sales charge, of course. They also appear to have an end date, at which point I assume the assets are sold and the principal returned to the investor (I'm sure with a suggestion from the financial adviser that those proceeds be rolled into another UIT with its own sales charge).

Here's an example if you're curious (for DAPBBX): https://www.aamlive.com/UIT/Summary/00778V424

Question: I'd like to just liquidate everything in their current account, move it to Vanguard, and invest it there. Is there something I'm missing about these products that would result in an additional penalty for selling before the end of the defined period? Or does it just depend on the UIT in question? They seem to be traded on the secondary market as far as I can tell.