Are you concerned about your investment losses The Energy Portfolio, Series 15 UIT sponsored by Guggenheim Investments? If so, The White Law Group may be able to help you by filing a FINRA arbitration claim against the brokerage firm that sold you the investment.
The Guggenheim Energy Portfolio, Series 15 is a Unit Investment Trust (UIT) consisting of securities of 43 companies in the energy sector as classified by Standard & Poor’s Global Industry Classification Standard, according to Guggenheim’s website.
This particular UIT is diversified across the energy sector to include the following industries: oil and gas drilling, oil and gas equipment and services, integrated oil and gas, oil and gas exploration and production, oil and gas refining and marketing, oil and gas storage and transportation and coal and consumable fuels.
The Energy Portfolio, Series 15
|Mandatory Maturity Date||8/26/2015|
|NASDAQ Ticker Symbol||CENPOX|
|Inception Unit Price||$10.000000|
|Inception Bid Price||$9.900000|
|Maturity Price (as of 8/26/15)||$6.367700|
A Unit Investment Trust (UIT) is an exchange-traded mutual fund offering a fixed (unmanaged) portfolio of securities having a definite life. Investors should be aware that there are risks to investing in UITs. For more information see Overview of Unit Investment Trusts.
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 ( NAV) . Typically a UIT will make a one-time “public offering” of only a specific, fixed number of units (like closed-end funds).
What are the risks?
Many UIT sponsors will maintain a secondary market, which allows owners of UIT units to sell them back to the sponsors and allows other investors to buy UIT units from the sponsors. Often, if units are bought back from the sponsor, it’s at a discounted rate, which means a loss for the investor. This can be problematic when the units are invested in volatile or risky sectors.
A UIT does not actively trade its investment portfolio. That is, a UIT buys a relatively fixed portfolio of securities (for example, five, ten, or twenty specific stocks or bonds), and holds them with little or no change for the life of the UIT.
Because the investment portfolio of a UIT is fixed, investors know basically what they are investing in for the duration of their investment. Unfortunately, if one of the securities is underperforming, no adjustments can be made. This is especially important in the volatile energy sector. Just because a UIT had excellent performance last year does not necessarily mean that it will again this year.
UITs have a termination date that is established when the UIT is created. When a UIT terminates, any remaining investment portfolio securities are sold and the proceeds are paid to the investors.
Many brokers are pushing “short-term strategy” trusts that dissolve after one to two years, possibly because of the high transaction fees, which are charged with the purchase and again with the dissolution. UITs can be very attractive to brokers due to the high upfront commissions, usually around 4%.
On behalf of investors, The White Law Group is investigating claims that some brokers violated securities law and FINRA regulations when selling certain UITs such as The Guggenheim Energy Portfolio, Series 15. It’s possible the broker-dealers failed to perform adequate due diligence on the UITs before offering them for sale to their clients and that the brokerage firms failed to determine whether the investments were appropriate in light of their clients age, investment, experience, net worth, and tolerance for risk. If a broker overlooks suitability requirements, investors may have an actionable claim to recover their losses in a product in a claim through FINRA dispute resolution.
If you have questions about your investment in The Guggenheim Energy Portfolio, Series 15 or another UIT and would like to speak to a securities attorney about your potential to recover losses through FINRA arbitration, please call The White Law Group at 1-888-637-5510 for a free consultation.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.