An investment trust that invests in a predefined portfolio of bonds and/or stocks that have been professionally selected by the company. Similar to some classes of mutual funds, these trusts are closed-ended and are not actively managed. The securities in the portfolio are fixed, and units can only be sold after the initial buying phase. These units tend to have a predefined life of a handful of years, after which they are liquidated and the proceeds are returned to the investors.

A defined portfolio can trade at different prices throughout the day. Units of a defined portfolio are priced by supply and demand, which can lead to discrepancies in pricing from the net value of its underlying assets. Mutual funds can be out of sync with their net asset values (NAV), but are only priced once a day at the NAV as of the close of trading.