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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Mutual Fund Scheme Selection

A client aged 28 with a stable job wants to build a retirement corpus over 30 years and can tolerate high volatility. Which category of mutual fund scheme would be the most suitable core choice for this goal?

An equity-oriented diversified fund is most suitable because a 30-year horizon and high risk tolerance allow the investor to ride out volatility and seek higher long-term growth, whereas overnight, liquid and ultra short funds are short-term, low-return parking options.

  1. AOvernight fund
  2. BLiquid fund
  3. CEquity-oriented diversified fundCorrect
  4. DUltra short duration fund

Explanation

A long horizon and high risk tolerance match equity-oriented diversified funds, which have the greatest long-term growth potential. Overnight, liquid and ultra short duration funds are low-risk debt products meant for parking money and would be unlikely to beat inflation meaningfully over 30 years.

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