Which type of UITF investment strategy typically involves higher volatility?

The type of UITF investment strategy that typically involves higher volatility is the equity fund. This is primarily because equity funds invest a significant portion of their assets in stocks, which are known for their potential for significant price fluctuations over short periods. The nature of the stock market is such that stock prices can rise and fall dramatically based on factors like company performance, market sentiment, economic conditions, and geopolitical events.

In contrast, conservative funds tend to focus on lower-risk investments, generally favoring bonds and money market instruments, which offer more stability but typically lower returns. Balanced funds invest in a mix of stocks and bonds, which can help mitigate volatility but still have exposure to the stock market’s fluctuations. Fixed income funds primarily invest in fixed-rate securities like bonds, which tend to have lower volatility compared to equity investments.

Therefore, investment strategies that focus on equity fund allocation are inherently more volatile due to the nature of the asset class, making them the correct answer in this context.