Investment liquidating trust


An investor whose objective is to purchase a home five years from now, may have these a portfolio of stocks and bonds designed with the intention to liquidate in five years.The cash proceeds would then be used to make a down payment for a home.NAV is defined as the total value of the portfolio divided by the number of shares or units outstanding and the NAV is calculated each business day.

The shareholders appoint a liquidator who dissolves the company by collecting the assets of the solvent company, liquidating the assets, and distributing the proceeds to employees who are owed wages and to creditors in order of priority.

Any cash that remains is then distributed to preferred shareholders before common shareholders get a cut.

A RIC is a corporation in which the investors are joint owners, and a grantor trust grants investors proportional ownership in the UIT's underlying securities.

Investors can redeem mutual fund shares or UIT units at net asset value (NAV) to the fund or trust either directly or with the help of an investment advisor.

Unit investment trusts, along with mutual funds and closed-end funds, are defined as investment companies.