I have started seeing the words "unit investment trust" crop up more and more frequently over the past year. REIT UITs. Internet UITs. You name it.

But trying to find information on unit investment trusts is another matter.

Morningstar

does not offer information on unit investment trusts.

Lipper

doesn't either. You can't find prices for them in the paper.

Are you curious? I was. And here is what I discovered over the past few days:

Like a mutual fund, a unit investment trust is a portfolio of stocks, bonds or both; however, it is a fixed portfolio of securities with a finite life. Think of a UIT as an index fund that has an expiration date. But UITs don't necessarily track indices.

UITs have been around for decades and were known for investing in long-term, tax-free bonds until the 1990s rolled around. But over the past several years, equity or stock UITs have become all the rage, with some investing in the hottest sectors and styles of the moment. Internet UITs, which

Alison Moore

wrote about in December, are a prime example.

UITs have a predetermined expiration date. With municipal bond UITs, the portfolios usually have maturity dates that run from 20 to 30 years. Equity UITs have shorter expiration periods. Many run one year to two years, but some extend out five or seven years. It really depends on what the objective of a portfolio and what it is investing in.

An investor owns a "unit" rather than a "share" of a UIT, and each unit is priced as a proportional fraction of the overall net asset value of the UIT. You can't find these prices reported in the newspaper, but you can get them from your broker.

There is a set offering period to buy into a UIT, but generally you can take your money out before the portfolio reaches its maturity date.

However, UITs are not structured to be actively bought and sold. They are sold through broker-dealers and generally not available directly from a portfolio's "originator," typically a brokerage firm or money manager.

You have to pay a sales charge to buy a UIT. These charges vary, and so does the structure of the payment schedule. The full commission may be paid at the time of purchase or spread over the life of the investment.

For example, the

Van Kampen Focus Portfolio: Internet Series Trust

, which has a two-year maturity, carries a 3.25% charge. There's an up-front payment of 1%, with 2.25% paid over the first eight months of the trust. Then there is a slight small management fee of under 30 basis points.

The charges will depend on the type of product and the expertise needed to build it. The more common Dow 10 UITs, which invest in the 10 highest-yielding stocks in the

Dow Jones Industrial Average

, may cost less than a more unique and unusual portfolio.

When you start talking about charges and fees, comparison shopping is always a good idea -- just to see what the next guy is asking for a similar product. But that is not an easy exercise when it comes to UITs. You have to rely on your broker to get information about UITs, including daily pricing information. (You'll also see UITs referred to as defined portfolios or defined funds, which for me just muddles the matter even further.)

"

Brokers generally have information on all investments in the UIT and defined portfolio world," says Robert Burke, head of defined portfolio marketing at

John Nuveen & Co.

in Chicago. "The sales charges are generally comparable, but the strategies may differ dramatically."

Of course, you will want to analyze the costs of any potential investment. But often the newest and latest UITs are investing in the best-performing areas of the market. You should closely examine the outlook for the sector to determine whether this is a proper place for your assets. Depending on your needs, you may be better off in a more diversified mutual fund.

I have only covered the very basics of UITs. If you have more specific questions and comments, email me at

fundforum@thestreet.com , and please include your full name.

A Bird with Different Feathers

The

Nasdaq-Amex Market Group

just launched its

Nasdaq 100 Index Tracking Stock

(QQQ) - Get Report

. The securities represent ownership in the

Nasdaq 100 Trust

, a unit investment trust designed to closely track the price and yield performance of the

Nasdaq 100

index.

This UIT, however, is open-ended, a different structure from the ones I describe above, and the securities trade on the

American Stock Exchange

just like stocks.

TSC Fund Forum aims to provide general fund information. Under no circumstances does the information in this column represent a recommendation to buy or sell funds or other securities.