Shifting Funds

Q

Can I move my money around within my IRA, switching between different stocks and mutual funds? — B.S., Norwalk, Connecticut

A

If your IRA is held at a brokerage, you should be able to buy and sell stocks within it, and also invest in mutual funds offered by that brokerage. You may be charged regular trading commissions for such trades, but you won’t be taxed on any gains while the money is in the account. (Learn about brokerages at our sister company, TheAscent.com.)

If your IRA is with a mutual fund company, you should be able to switch between its funds, but you probably can’t invest in any individual stocks.

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Q

What’s a UIT? — E.N., Watertown, South Dakota

A

It’s a unit investment trust — a kind of investment company similar to a closed-end mutual fund (which sells a fixed number of shares at its outset).

A UIT raises money from investors based on its investment strategy, typically via a onetime public offering of “units” (which are like shares). That money is invested in a portfolio of stocks, bonds and/or other securities that’s not meant to change its composition over time — in other words, the UIT is committed to those securities. That’s a plus for investors who want to own those securities, but a minus for those who prefer to have savvy fund managers buying and selling over time based on the performance of companies, changing trends and the economy. Some UIT units can be traded back to the company, but others must be held until the investment is dissolved, at a predetermined date, when proceeds are distributed among unit holders.

You can learn more about UITs by searching for the term at sites such as SEC.gov and Google.

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