Which of the following is a characteristic of an Equity UITF?

The correct choice is that an Equity UITF invests predominantly in stocks. Equity UITFs are designed to provide investors with exposure to the stock market. They primarily allocate their assets to equity securities, which are shares of companies. The performance of an Equity UITF is closely tied to the fluctuations in the stock prices of the companies it invests in.

This focus on equities is intended to take advantage of the potential for capital appreciation that comes with investing in stocks, which generally offer the opportunity for higher returns over the long term compared to other asset classes. Therefore, for investors looking for growth potential and exposure to the equity market, an Equity UITF is the appropriate vehicle.

In contrast, other options such as those involving real estate investments or government securities do not align with the primary characteristic of an Equity UITF, which is distinctly centered around stock investments. Similarly, an emphasis on short-term financial instruments would indicate a focus on different investment strategies and goals, typically found in money market or bond UITFs rather than equity-focused instruments.