Which type of fund is characterized as open-ended?

The correct choice is Property Authorised Investment Funds (PAIFs) because they are designed to allow for continuous buying and selling of shares based on investor demand, which is a defining characteristic of open-ended funds. In an open-ended fund structure, the fund's capital can fluctuate as investors enter and exit, enabling it to issue new shares or redeem existing ones at the prevailing net asset value (NAV).

In contrast, closed-end funds do not allow for continuous buying and selling of shares. Instead, they raise a fixed amount of capital through an initial public offering and then trade on exchanges, similar to stocks. The share price of a closed-end fund may diverge from its NAV.

While Property Unit Trusts and Exchange Traded Funds (ETFs) can have characteristics of both open- and closed-end structures, PAIFs distinctly fall into the open-ended category due to their operational mechanism that is designed to facilitate ongoing transactions directly with the fund, reflecting the open-ended fund model.