What is a characteristic of a unit trust?

A unit trust is characterized primarily by its structure of pooling money from multiple investors to make collective investments. This setup allows individual investors to participate in a diversified portfolio that they may not be able to access or manage on their own due to limited capital or expertise. The pooling mechanism typically involves the trust raising funds by issuing units to investors, each representing a share of the overall investment pool.

While options such as share trading, risk categorization, and guaranteed returns may apply to certain investment vehicles, they do not typically represent the core essence of a unit trust. For instance, unit trusts are not traded like stocks on an exchange; instead, they are bought and sold based on the net asset value as calculated at the end of the trading day. Additionally, unit trusts can invest in a range of assets, including both high-risk and low-risk options, but they do not limit themselves exclusively to high-risk assets. Lastly, returns from unit trusts are based on the performance of the underlying investments and are not guaranteed, making the option indicating guaranteed returns inaccurate for this context.