Unit investment trusts, hybrid investment products which fall somewhere between mutual funds and direct ownership of either equity or fixed-income securities, could gain in popularity and pose a growing threat to mutual fund assets, some industry executives say.
For the first 11 months of 1998 ending November 30 (the latest figures available) mutual funds as a whole took in more than $481 billion, according to the Investment Company Institute. UITs took in $57 billion during the same time period. While that is only a fraction of the inflows to mutual funds, it represents a 54% increase in flows from 1997 when UITs attracted close to $37 billion. By comparison, inflows to mutual funds grew 36 percent in the comparable periods. In the first 11 months of 1997, mutual fund inflows were $354 billion.