Defined asset fund

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Defined asset fund

A unit investment trust consisting of a fixed portfolio of securities, including blue chips, REITs, or high-yielding stocks on a major exchange such as the NYSE or FTSE.

Defined Asset Fund

A unit investment trust that exists only for a limited period of time, after which it is liquidated. A unit investment trust consists of an unmanaged portfolio of securities, the rights to which are sold to investors as shares or units. The dividends and/or coupons from these securities are passed on to unit holders, just as in a mutual fund. A defined asset fund works like this, with the addition that, at a certain maturity, the assets in the fund are liquidated and distributed to unit holders.
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Many investment vehicles are available in such areas as bonds, defined asset funds, trusts, and annuities.
If investors roll over into a new trust, and many of the same stocks are in that trust, taxes can be deferred on those companies," says Timothy Mahoney, chief investment officer with Defined Asset Funds in Princeton, New Jersey.
Before joining Banc of America Securities, he worked as a buyside equity trader at Merrill Lynch Defined Asset Funds.
Prior to joining Prudential Financial, King was chief portfolio strategist for Merrill Lynch Defined Asset Funds, where he managed the investment process for equity assets held in strategy-based equity products and oversaw asset allocation and risk analysis functions.

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