A UIT is a type of investment vehicle defined by the Investment Company Act of 1940 as having a fixed portfolio of specified securities that it holds for a defined period of time, after which it terminates. A UIT is created by a sponsor who deposits securities into a trust, managed by a trustee, with units then sold to investors. Unlike actively managed funds, a UIT does not trade its portfolio during its lifetime. Main advantages are lower costs, tax efficiency, and more predictable returns due to its static portfolio, but risks include lack of active management and sales charges.