Which term describes the situation where more units are issued than redeemed in mutual funds?

The correct term for the situation where more units are issued than redeemed in mutual funds is "net sales." This term indicates a positive flow of investment into the fund, where the total number of new units purchased by investors exceeds the number of units that have been sold back or redeemed. This condition usually signifies a strong investor interest in the mutual fund, implying that the fund is attracting more capital than it is losing.

Understanding net sales is crucial for evaluating mutual fund performance and investor sentiment. In contrast, "net redemptions" would refer to the situation where more units are being redeemed by investors than are being purchased, which suggests that investors may be pulling out their money due to various factors such as poor performance or changing investment strategies. "Capital gains" relates to the profit earned from the sale of investments and does not specifically address the issuance and redemption of units in funds. Lastly, "unit trust" is a type of investment structure that pools funds from multiple investors, but it does not specifically reflect the flow of units in the context of mutual fund transactions.