The performance of equity unit investment trusts

George Comer (Department of Finance, Georgetown University, Washington, District of Columbia, USA)
Javier Rodriguez (Graduate School of Business, University of Puerto Rico, San Juan, Puerto Rico, USA)

Managerial Finance

ISSN: 0307-4358

Publication date: 8 April 2019



The purpose of this paper is to examine the risk adjusted performance of unit investment trusts (UITs). These UITs are a unique investment vehicle in that the trusts invest in a fixed portfolio of stocks for a predetermined period of time and hold limited cash positions.


Using a sample of 1,487 UITs from January 2004 to December 2013, the authors estimate the risk adjusted performance of the UITs. The authors use daily return data and four different returns based models to measure the alphas of the UITs.


The authors find that before fees and expenses the UITs generate significant negative alphas. The authors also find that observable trust characteristics are unable to explain the poor risk adjusted performance of the trusts.


Despite $85bn being invested in these unique buy and hold vehicles, the academic literature has not examined the risk adjusted performance of the trusts. The poor performance of these trusts indicates that restricting flexibility and maintaining full investment for a fixed period of time may not be beneficial to investors.



Comer, G. and Rodriguez, J. (2019), "The performance of equity unit investment trusts", Managerial Finance, Vol. 45 No. 4, pp. 470-483.

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