Which of the following is NOT a characteristic of a Unit Investment Trust Fund (UITF)?

A Unit Investment Trust Fund (UITF) is typically characterized by its open-ended structure, meaning that investors can purchase and redeem their units based on the prevailing net asset value per unit. This feature provides liquidity and flexibility for investors, allowing them to enter or exit the fund at their discretion, subject to the policies set by the fund itself. The operation of UITFs by a trust entity ensures accountability and adherence to fiduciary standards, while participation-based accessibility signifies that a diverse range of investors can invest in these funds, depending on minimum investment requirements.

The closed-ended nature, on the other hand, refers to a different category of investment vehicles, often known as closed-end funds. In contrast to UITFs, closed-end funds have a fixed number of shares issued through an initial public offering and trade on the stock exchange. This does not align with the fundamental characteristic of UITFs, which remain flexible in terms of unit creation and redemption. Thus, identifying the characteristic that does not apply to UITFs directly points to the misconception that they are closed-ended, affirming the understanding of their operational structure.