First Trust GNMA Reinvestment Income Trust, 120 is a unit investment trust designed to provide monthly interest distributions by investing in a portfolio of Ginnie Mae (GNMA) mortgage-backed securities. These underlying securities are backed by the full faith and credit of the U.S. government, offering a high level of principal and interest payment security within the trust. The trust aims to make the income potential of GNMAs more accessible to a broader range of investors through its lower minimum investment and reinvestment structure. Principal payments and prepayments from the GNMAs are automatically reinvested into additional pools with similar coupon rates and maturities, as long as practical, which may help stabilize both the income flow and portfolio value. The trust has a regulated investment company tax structure and features monthly accrual and distribution of interest. By focusing exclusively on Ginnie Mae securities, First Trust GNMA Reinvestment Income Trust, 120 serves investors seeking consistent government-backed income within the broader U.S. fixed income market, while offering a more convenient entry point than direct GNMA bond ownership.
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