Close this search box.

Table of Contents

Widely Held Fixed Investment Trust (WHFIT)


A Widely Held Fixed Investment Trust (WHFIT) is a type of investment trust in which the ownership of the trust is spread across numerous individual investors. The assets held by a WHFIT are typically fixed, meaning they are not actively managed and the portfolio remains the same throughout the life of the trust. WHFITs are often used for holding a portfolio of bonds, mortgages, or other income-producing assets.


The phonetics of the keyword: Widely Held Fixed Investment Trust (WHFIT) would be: “Why-dlee Held Fixed In-vest-ment Trust (Double-you Aich Ef Eye Tee)”

Key Takeaways

<ol><li>Widely Held Fixed Investment Trust (WHFIT) is an investment trust where a large number of investors hold interests. Such trusts are typically structured in such a way that they generate regular income for investors, either through interest, dividends or capital gains.</li> <li>The key advantage of WHFITs is their convenience. They allow investors to gain exposure to a broad range of assets without needing to buy and manage individual assets themselves. Additionally, they provide a steady stream of income, making them ideal for investors seeking regular returns.</li> <li>On the other hand, WHFITs are not without risks. They are vulnerable to market fluctuations and, due to the fixed nature of many of their investments, they may not offer as much growth potential as other investment types. They might also have high fees which can eat into the overall returns.</li></ol>


Widely held fixed investment trusts, or WHFITs, are important because they provide a form of collective investment, allowing investors to pool resources to invest in a diversified portfolio of financial instruments. These trusts are structured such that the trustee does not have the power to manage the assets actively, but rather, the assets are established at the trust’s formation and are later fixed. Key aspects like timing of income recognition and tax treatment of income and fees could further depend on regulations pertaining to WHFITs. This makes the understanding of WHFITs essential for investors, especially those interested in passive management strategies and seeking to reduce their tax liabilities through investing in specific trust structures.


A Widely Held Fixed Investment Trust (WHFIT) is a type of investment vehicle used in the financial marketplace, primarily intended to enable a large number of investors to pool their assets together in a portfolio for investment purposes. These entities are created specifically to generate income for investors by acquiring and holding a fixed portfolio of securities. Rather than actively managing these assets, the trustee typically retains the original portfolio configuration for the life of the trust. This strategy can offer significant benefits such as diversification and economies of scale, which can help to heightened portfolio performance and reduce risks.The income generated by the WHFIT is passed through to the investors, proportional to their ownership stakes. This structure provides a mechanism for individual, small-scale investors to attain access to a diversified and professionally selected portfolio that otherwise might be beyond their reach. This is advantageous especially for investors seeking regular income and those focussing on a more risk-averse approach. These vehicles are largely used for investments in mortgages or other debt instruments, but they can also include instruments such as royalties, patents, and certain types of commodities contracts. The use of WHFITs therefore represents an important aspect of investment strategy, particularly for those investors seeking a steady flow of income.


1. Mortgage Backed Securities (MBS): Mortgage Backed Securities are one example of Widely Held Fixed Investment Trusts. They consist of a pool of home loans collected by lenders from various borrowers. These loans are then bundled and traded as securities. The income generated from the interest and principal payments made by borrowers is then distributed among the investors. 2. Unit Investment Trusts (UIT): UIT is an investment firm offering a fixed (unmanaged) portfolio of securities having a definite life. Like MBS, UIPs are also a type of WHFIT. A UIT typically issues redeemable securities (or “units”), like a mutual fund, which means that the UIT will buy back an investor’s “units,” at the investor’s request, at their approximate net asset value.3. Royalty Trusts: These are investment vehicles that hold interests in mineral or energy assets and generate income from the extraction and sale of these resources. Royalty trusts provide an investment opportunity for individuals looking to finance projects related to mining, drilling, and other resource extraction. They collect regular royalties, providing income for their investors, making them a type of WHFIT.

Frequently Asked Questions(FAQ)

What is a Widely Held Fixed Investment Trust (WHFIT)?

A Widely Held Fixed Investment Trust (WHFIT) is a type of investment trust that possesses a fixed portfolio of investments. These investments are distributed among a large number of investors and managed by an independent trustee.

How does a WHFIT operate?

A WHFIT operates by collecting assets from numerous investors and consolidating them into one comprehensive trust. This trust is then managed by an independent trustee who makes investment decisions on behalf of all participants.

What types of assets are generally held in a WHFIT?

The assets held in a WHFIT can vary widely, but commonly include those income-generating like mortgage-backed securities, royalty trusts, and other types of debt securities.

What are the risks involved in investing in a WHFIT?

The risks in investing in a WHFIT can include market risk, where the value of the assets within the trust may decrease. There’s also the risk of default or non-payment by the issuers of the securities held within the trust.

Is income from a WHFIT taxable?

Yes, the income from a WHFIT is generally subject to taxes. Trust investors will likely receive a Schedule K-1 for use in their personal tax return preparations.

How does a WHFIT differ from a mutual fund?

A WHFIT is different from a mutual fund because it has a fixed portfolio, which means the assets it holds won’t be bought or sold unless it’s necessary to maintain the operation of the trust. On the other hand, a mutual fund’s portfolio is subject to frequent changes as determined by the fund’s management.

Who typically invests in WHFIT’s?

WHFITs are typically institutional investors or individuals with a high net worth. They appeal to these investors because they can offer a unique mix of income generation, diversification, and possibly favorable taxation.

How does one invest in a WHFIT?

To invest in a WHFIT, one usually needs to go through a financial advisor or broker who offers these types of trusts.

Related Finance Terms

  • Trustee Fee
  • Undistributed Income
  • Income Distribution
  • Investment Trust Statement
  • Non-pro rata Allocation

Sources for More Information

About Our Editorial Process

At Due, we are dedicated to providing simple money and retirement advice that can make a big impact in your life. Our team closely follows market shifts and deeply understands how to build REAL wealth. All of our articles undergo thorough editing and review by financial experts, ensuring you get reliable and credible money advice.

We partner with leading publications, such as Nasdaq, The Globe and Mail, Entrepreneur, and more, to provide insights on retirement, current markets, and more.

We also host a financial glossary of over 7000 money/investing terms to help you learn more about how to take control of your finances.

View our editorial process

About Our Journalists

Our journalists are not just trusted, certified financial advisers. They are experienced and leading influencers in the financial realm, trusted by millions to provide advice about money. We handpick the best of the best, so you get advice from real experts. Our goal is to educate and inform, NOT to be a ‘stock-picker’ or ‘market-caller.’ 

Why listen to what we have to say?

While Due does not know how to predict the market in the short-term, our team of experts DOES know how you can make smart financial decisions to plan for retirement in the long-term.

View our expert review board

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More