Ginnie Mae trust

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Ginnie Mae Trust

A unit investment trust that invests exclusively in Ginnie Mae certificates. It operates much like a Ginnie Mae mutual fund, but returns for a Ginnie Mae trust are given to the investor rather than reinvested. Thus, if one purchases a Ginnie Mae trust, one receives progressively smaller coupon payments as the mortgages underlying the trust are paid off.

Ginnie Mae trust

A unit trust that invests in Ginnie Mae certificates and passes through interest and principal repayments to the trust's owners. Ginnie Mae trusts differ from Ginnie Mae mutual funds in that the trusts do not continually invest in new certificates. As principal is returned, the trust's owner will receive progressively smaller interest payments. Essentially, owning a Ginnie Mae trust is much like owning a certificate itself. A sales fee is charged, but, unlike Ginnie Mae funds, a trust charges no management fee because no management is involved once the trust has been set up and has become operative.